Research Center

Due to the lending activity accelerating in 2020-end and high demand for cash just before the New Year’s period, short-term fixed-income rates were facing great upward pressure by late-January. Interbank rates and short-term G-bond yields were breaking a multi-month downward trend in the month. From our perspective, the interbank and G-bond markets will continue to face liquidity shortage temporarily, which in turn push those corresponding rates to higher levels in February.

Vietnam's economic conditions in the first month of 2021 remain favorable as trade activities and retail sales continued high growth. Looking ahead to February, the domestic economic activity may be weakening due to the new outbreak, and the negative impact will be largely dependent on how the government controls the pandemic.

Insurance revenue growth rate was not in tandem with the increasing velocity of insurance operating expense, it made the net loss from insurance operation leap to VND5,969bn (+39.4% yoy) in FY2020. However, BVH achieved splendid financial profit by 1) improving financial income to VND9,496bn (+20.6% yoy) and 2) cutting financial expense to VND1,754bn (-19.7% yoy). As of the end of 2020, they were successfully above the target with net profit as VND1,604bn, completed 160% of 2020 goal.

Even though VCB 4Q20 TOI reached 97% of our forecast at VND14.4tn, the bank’s NP completed just 89% at VND5.7tn (+29% yoy and 42% qoq) due to a surprised move of credit cost at VND3.9tn, up 92% qoq and 61% vs. our forecast. This pushed NPL coverage ratio to peak at 370%. As we believe that VCB has been made full provision on COVID-19 distressed loans and respect the bank’s success in retail banking business, we upgrade to BUY.

After two gaining sessions in a row, the market sentiment has become cautious in the short term. Notably, the Tet holiday is coming. Besides, the 1,200-pts threshold is the significant resistance in the long term. Thus, the downside risk is intact. Traders should be careful and wait for the next signals.

Long positions captured at 1,100 pts zone should not be closed and only out positions when 1,105 pts level is broken. For new positions, traders should wait for the clearer big picture.

In 4Q20, Vinamilk reached VND14,425bn revenue (+1.3% yoy), mainly thanks to revenue contribution of GTNFoods with VND682bn. Although EBIT decreased 14.1% yoy due to narrowing gross margin of Vinamilk domestic market and the increase of SG&A expense ratio, Vinamilk’s NPAT post-MI recorded VND2,185bn NPAT, dropping slightly 0.8% yoy, mainly thanks to 3.3x increase of financial income in 4Q20. In overall 2020, Vinamilk reached VND50,842bn revenue (+6.9% yoy) and VND11,099bn NPAT post-MI (+4.9% yoy).

Long positions captured at 1,100 pts zone should not be closed and only out positions when 1,045 pts level is broken. For new positions, traders should wait for the second entry point which will occur this week.

The VNIndex surges sharply two sessions in a row, however, the 1,200-pts threshold is the significant resistance in the long term. Thus, the downside risk is intact. Traders should be careful and wait for the next signals.

Despite the sharp recovery, the short-term downtrend confirms. Thus, traders should reduce long positions and wait for the next signals.