Looking at 2H2019 in the stock market
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Source: Van Eck, chart by Vietecon.com
I wanted to go back today (and probably the next few days) and look at what really drove the market over the past six months. I did this at the end of 1H2019 (see here) as well.
Performance in 1H wasn’t too bad (+9%), while the second half was completely flat (using the VNM index - which has its own issues, more below). The market disappointed, especially in comparison to the S&P 500, which killed it in 2H19 (+11%), and considering strong growth in Vietnam (7%, according to the government) and strong exports.
At certain points, it looked like we would see some movement, especially during July and at the beginning of November. But the energy dissipated by the end of the year.
Source: Vietecon.com calculations. All returns in local currency.
The surprising thing is that there are very few Vietnamese companies that had a great second half. The chart to the right shows returns - stock’s weighting in the index as you move right, so VIC has the greatest weighting at almost 8%. Note that these are all based on local currency returns; it doesn’t take into account currency differences or changes in weightings.
The only Vietnamese stocks that did well were:
VCB: A bank, up 27% and a 8.2% weighting at the beginning of the period.
SBT: A bank, up 7% and a 2.6% weighting.
TCH: A truck dealer, up 50% with a 2.1% weighting.
HPG and VHM both rose in low- to mid-single digits. But it wasn’t too impressive. Alhtough VHM (Vinhomes) has a high weighting at 6.4% at the beginning of the period, going to 7.3% at end December.
The foreign companies were generally better, although not all of them. Mcnex (097520 KS) really outperformed, up 31%. And BH Co. LTD (090460 KS) also did well (+18%). Mani (7730 JP) was the best of the foreigners, up 36%. All had weightings between 3.5% and 4.75%.
In addition there were some changes in the constituents themselves. Four stocks left (although only two were noticable):
Petrovietnam Nhon Trach 2 Power: 1.13% weighting and fell 20%.
Regina Miracle (2199 HK): Intimate apparel manufacturer. 1.69% weighting, fell 1%.
Two other stocks (VCG and STB) were barely in the index but were listed at the close of June but with less than 0.01% of assets.
These two stocks came in to replace Petrovietnam and Regina Miracle:
Vietjet (VJC): The low cost carrier was actually down 13%, despite a massive increase in tourists. Probably not helped by lots of competition.
Seojin Systems (178320 KS): This is a Samsung supplier that did well - up 12%. It ended the period with a 3.88% weighting
The index now has 25 constituents.
Tomorrow I will look at some other interesting trends I saw in the data.