IPOs are providing an increasingly attractive way to participate in Vietnam’s stock markets.IPO activity was constrained during the economic downtrend from 2010 to 2013, but began an upswing in 2017 with 27 deals totaling USD1.35bn of offering proceeds. Vincom Retail (VRE) helped real estate become the most noticable sector in 2017 with its USD700mn IPO. Banks were also active with VP Bank and HD Bank raising USD240mn and USD300mn, respectively. The energy sector has been the most active in Q1
The VN-Index closed the month at an all-time high level. Despite some profit taking pressure in large cap stocks which caused minor pullbacks during the month, the VN-Index still increased 4.7% MoM to close the month at a peak of 1,174.5 a day after an upbeat GDP announcement. The VNI has so far this year outperformed others indices in the region with an increase of 19.3% YTD vs the Thai SET (1.3% YTD), Indonesia JCI (-2.6% YTD) and the Philippines PCOMP (-6.7% YTD).
The VN-Index hit an 11-year high despite a sharp pullback early in the month. A global slump began in the US then slammed into the Vietnamese market driven by fear that higher than expected inflation, resulting from tax cuts, could force the Fed to step up the pace of its interest rate hikes. Domestic news regarding raising the margin ratio from 50% to 60% also contributed to the bearish momentum, which sent the VN-Index plunging 9.6%.
The VN-Index accelerated strongly in January after cracking the psychological resistance level of 1,000. Successful divestment in Sabeco, solid 2017 macro results and a positive outlook for 2018 buoyed market sentiment last month. The VN-Index surpassed 1,000 on the first day of the year, then continued to surge higher. Despite a small pullback in the middle of the month due to profit taking and SSC’s proposal on tightening margin lending, the VN-Index still closed the month at 1,110.4, a sharp
State divestments fueled market sentiment. Despite a correction in early December, news that ThaiBev invested USD4.8 billion in Sabeco, signs from SCIC that it plans to divest more of its stake next year and a strong recovery in the energy sector buoyed market sentiment in December. Moreover, investor confidence was reinforced in the last days of the year by Vietnam’s FY2017 GDP growth reaching 6.81%, the highest rate in a decade.
There is an old saying that opportunities come to those who are both lucky and prepared. Such was the case for Vietnam in 2017. Vietnam was lucky to benefit from strong growth in global GDP and consumption and a risk-on global capital market eager to look at emerging markets. At the same time, it was prepared with a growing manufacturing base, emerging middle class and a stable macro environment that was very hospitable to foreign investment.
The VN-Index extended its rally to fresh 10-year highs bolstered by APEC and state divestment. Market sentiment was buoyed during the first half of November by the expectation that the APEC Economic Leaders’ summit in Da Nang, with the participation of the leaders from 21 member economies and thousands of CEOs, would bring numerous opportunities for host country Vietnam. Besides APEC, state divestment activities and plans also boosted the market.
The VN-Index reached its highest level in nearly 10 years in October at 845 points led by large-cap stocks such as ROS (+86.7% MoM), VIC (+14.2% MoM), SAB (+9.9% MoM) and VCB (+10.1% MoM). ROS became a focus of the market as its price nearly doubled during the month and contributed 17.2 points or 52% of the total increase of the VN-Index in October.
The VN-Index hit 808, its highest level since February 2008. With strong upward momentum from late August, the VN-Index breached technical resistance at 790-795 to reach a new nine and a half year high of 808 on September 18. Profit-taking pressure kept the index between 802-808 in the final week of the month so that it closed September at 804.4, up 2.8% MoM and 21% YTD.
VN-Index pulled back strongly after breaching 790. The index accelerated at the beginning of the month to surpass 790 on August 7, partly supported by the divestment news of VNM and rumors of divestments of SAB and BHN. However, a rumor of a banker’s arrest, escalating tension between the US and North Korea and profit taking activities all led to a sharp sell-off on August 9 as the VNI plummeted nearly 18 points (-2.3%) to 773.66, the biggest one-day loss in 19 months. The pullback deepened