Checking in on the stock market

Sorry for the long time, no write. I was on vacation for a week and have been preparing for the big move over the past few days. It always takes much longer than you expect. And COVID doesn’t help. I should be a bit more regular over the next few days, but next week might be tough.

Because I missed a lot of news, I wanted to quickly check in on on the stock market, just to get a sense of where we stand. If you avoided the daily ups and downs and just look at the trends over the past seven months, you see a very different picture. For example, look at these two charts that I put together. They are a bit busy, but I wanted to put a lot into them.

Source: Vietstock.vn, investing.com, Bloomberg. Chart by Vietecon.com

The first chart is a bar chart that shows how each of these major markets moved during the past seven months. The first quarter was down for everyone. And everyone showed an increase, with some growing more than others, in the second quarter. The increase wasn’t enough to overcome the deficit from the first quarter, so 1H results were pretty disappointing across the board, excluding HNX (which is a weird index) and Nasdaq (showing the strong results of tech). Then we saw a pick up in July so far, which has erased the SPX losses and helped improve every other index. None of this is that surprising.

The second chart is the same but in line form. Since I didn’t include daily prices (too time-consuming), you only see the trends. And the big trend is that everyone should have just held most of their stocks, at least in the US, despite COVID. NASDAQ is way up (18%). And the SPX has now slightly risen above its yearend 2019 price.

If you told me this is how it works out back in late March, I would have assumed that this could only have occurred if COVID was quickly defeated and/or there was a miraculous treatment/vaccine. None of those things happened. We are definitely living in a COVID world (even if it isn’t in Vietnam much).

Sadly, Vietnam’s success in fighting COVID, which really shows off the system, has not stopped the stock market from falling. [Note that VNX is a better index, in my opinion, than HNX, because it reflects so many more and more important stocks.] The VNX is down 10%, and the VNM ETF is down 11%. VNM is slightly more exposed to exporters, because about a third of the index is non-Vietnamese companies with large export operations in the country. [Currency has a bit of a negative impact on VNM as well, because the KRW has depreciated about 4% YTD.]

I want to dive a bit more into this over the next few days, but a few stocks caught my eye:

Vincom is the most important stock in Vietnam, for market cap reasons, but also because the company has been such a leader in Vietnamese technology and trends. It is down 22% ytd, and it is now no longer the biggest stock in the market.
That title now belongs to VCB, which is down just 9% (for about 13pp of outperformance) and is now worth VND304tr ($13bn). VCB and VIC are basically neck and neck, so I expect them to swap places a lot.
Real estate was all over the place. Vinhomes fell 7%, but NoVa Land rose 6%. Khang Dien was down 8%, but Dat Xahn was down 30%. Performance was likely due to specific events at the companies.
Electronics companies seem to be doing well. Synopex was up 63%, Seojin grew 40%. The local GEX was up 3%,
Retail generally did poorly. Vincom Retail down 17%, Phu Nhuan Jewelry (-30%), MWG (-27%), Masan (-5%).

There is a lot more to this, but I need a bit more time to look through it all. More tomorrow. Enjoy!

VietEcon

Checking in on the stock market

VietEcon