Vietnam Daily Market Recap December 5, 2024 – Oil Initiation & Market strategy

Market commentary: Stocks enjoy biggest gain since August, led by financial services

After selling off yesterday, the VN-Index reversed course on Thursday and surged 2.2% to 1,267.5, the largest one-day increase since August 16. Total trading value rose sharply by 60.7% compared to Wednesday to VND19.2tn (USD755.6mn). The HNX Index followed a similar pattern, jumping 2.2% to 223.5.

Almost all sectors gained today, including Financial Services (+5.9%), Real Estate (+2.7%), Basic Resources (+3.6%), Retail (+3.2%) and Banks (+2.1%) and Food & Beverage (+1.6%). In contrast, sectors such as Telecommunications (-2.9%), Travel & Leisure (-0.8%) declined.

Brokerage stocks were outstanding performers today, including SSI (+6.9%), VCI (+6.9%), VND (+4.5%), HCM (+6.9%), FTS (+6.9%) and MBS (+9.5%). Representatives of FTSE are in Vietnam and have met with some custodians and brokers, apart from the SSC. The outlook is quite positive; they seem to be satisfied with the development of non-pre-funding policies but still have some concerns about the delay in obtaining securities trading codes. Vietnam has already satisfied seven of FTSE’s criteria for upgrade to EM status. If Vietnam addresses the remaining parameters (including the NPF rules), the country’s upgrade to secondary emerging market status in March is entirely feasible. This would mark a significant milestone, attracting substantial capital inflows from investment funds tracking the FTSE Emerging Markets Index. The market seems to be reacting positively to this information, especially the brokerage stocks.

Blue chips outperformed today, with the VN30 rising 3.1%. Top performers today included names that are most likely to be purchased by emerging market ETFs if Vietnam is upgraded, such as HPG (+4.1%), FPT (+3.5%), CTG (+3.1%), VHM (+3.2%) and BID (+1.9%). Top laggards included HVN (-3.1%) and VTP (-6.9%).

BID plans to issue up to nearly 1.2 billion common shares to pay dividends to shareholders, aiming to increase its charter capital from ~VND57.0tn (USD2.24bn) to nearly VND69.0tn (USD2.72bn). The issuance is expected to take place between 4Q24 and 1Q25.

Foreign investors net bought today with VND676.5bn (USD26.6mn), with buying momentum focused on HPG (VND126.6bn, USD5.0mn), MSN (VND79.4bn, USD3.1mn), FPT (VND74.4bn, USD2.9mn) and SSI (VND71.6bn, USD2.8mn), while foreigners mainly sold VCB (VND92.3bn, USD3.6mn), HSG (VND37.7bn, USD1.5mn), and VTP (VND36.5bn, USD1.4mn).

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