In July, VNIndex went down 3.24% due to 1) The anticipation of 2Q’s poor earnings results and 2) The outbreak of Covid-19 in Danang in late July. VCB, VNM and VJC lost traction the most and trading liquidity decreased sharply 34% MoM to USD 217 mil. PYN Elite NAV dropped slightly less by 3.06%, dragged down by ACV, MWG and PAN.
Vietnam has reported 174 community transmitted cases and 6 deaths since July 25, bringing the number of total cases to 620 by August 3. However, the government has immediately taken effective measures to control the situation, including the 14-day social distancing order in Da Nang, sending best doctors and experts to the pandemic areas, and applying stricter rules such as compulsory mask-wearing in public places in HCMC. We believe that Vietnam will successfully manage the second wave of the virus as they did with the first wave.
As of Aug 3, 812 listed companies on three bourses, corresponding to 95% of market cap, have posted 1H20 results. Although the pandemic weighed down most companies’ results, overall figures were better than consensus with aggregate revenue -10% YoY and aggregate NPATMI – 20% YoY. Meanwhile, PYN-Core companies posted 1H revenue -1% YoY and NPATMI -7% YoY, driven by better-than-expected banks’ earnings (TPB +26% YoY, CTG +39% YoY, HDB +32% YoY) and strong results of property and IT stocks (KDH +90% YoY, CII +507% YoY, FPT +15% YoY).
Macros: Exports +0.3% YoY (vs Jun -2.0%), imports -2.9% YoY (vs Jun +5.3%), CPI +3.4% YoY (Jun 3.17%), industrial production +1.1% YoY (June 7.2%). PMI went down to 47.6 and back to contraction zone, indicating that manufacturing was still weak due to declines in output and new orders. On the other hand, FDI and public investment continued to be the bright spots. Registered FDI surged 49.3% YoY, mostly thanks to additional investment for the West of Westlake urban area (USD 774 mil), while disbursed FDI edged up 1.4% YoY. Public investment was estimated at nearly USD 2bn, +52% YoY. YTD, total disbursement reached USD 8.8 bn (+27% YoY) ~ 43% of 2020 plan. Vietnam is on its way to record economic growth of +3-5 percent in 2020 and domestic demand would recover supported by the lowered interest rates.
PYN Elite Monthly Review July 2020_EN.pdf