Update On Vietnam’s Budget And Debt

Recently, the Ministry of Finance released preliminary documents of the public budget for 1H2018. The most important point is that, sot seen for a long time, the budget is in surplus. That is due to lower growth of current expenditures, which accounts for 80% of the total state budget expenditures. Meanwhile, tax revenue was adversely affected by lower import-export taxes as Vietnam joined many Free Trade Agreements (FTAs). The pressure on debt repayment is the lowest than it will be in the next three years. Payment on the principal has been lower this year and therefore positive for the budget.

NT2 - Result Update on PetroVietnam Power Nhon Trach 2 JSC

RongViet Securities Corporation hereby presents the Result Update on PetroVietnam Power Nhon Trach 2 JSC (HSX: NT2) with the overall opinion as follows:

FRT - Update on 1H’s result

In the first 6 months, FRT achieved a growth of 17% in sales (target is 22%) and 30% in NPAT. The company opened 43 new stores, increasing the total store count to 517. The unimpressive revenue growth was the result of the two installment programs (F.Friends and Subsidy) not meeting expectation as well as the delay in the expansion plan for F.Studio which was due to difficulties coming from Apple. The bright spot came from the improvement in performance of Long Chau – the drugstore chain.

1H2018 Update on seaports in Haiphong

The overall picture for seaports in Haiphong in 1H2018 was in-line. The trend is to move containers from upstream ports to downstream ones as shipping lines prefer the latter ones because of more favorable  technical conditions.

PVS – Prospect From 2019 on

We believe that PVS will benefit the most due to its leading position in the upstream segment. Despite a not so “bright” outlook in 2018, we should expect a growth in net profit from 2019 on.

MPC – Efforts to Come Back to the Race

After two years of being delisted, Minh Phu comes back trying to resolve long existing issues to get ready to re-list on HOSE in 2018.

Greece finally exits from eight years of international financial assistance

The country, on Monday, ended eight years of international financial assistance but has a high tax level, poor competitiveness and a gigantic public debt. Is it the end of the Odyssey?

Samsung Display and LG Display to be the OLED suppliers for Apple

Since the iPhone X and iPhone 8, Apple has been using organic light-emitting diode (OLED) panels for its screen instead of the previous liquid-crystal display (LCD). OLED is reported to be crisper and easier on batteries. However, iPhone X sale appears to disappoint expectations since it was first launched in November 2017.

NT2 – The problem lies not in gas supply but in gas prices

Although the supply of gas from old gas fields in Nam Con Son basin is projected to fall sharply from 2020, supply from new gas fields and the LNG Thi Vai project would ensure adequate gas supply for power plants in the Southeast region. However, as these new sources have much higher gas prices, this change would result in higher average gas prices for power plants in the Southeast region in the coming years. In addition, the contract volume (Qc) of thermal power plants, including NT2, was reduced from 2018, business results of the company would become even more sensitive to the adverse effect from rising gas prices.

BMP: Update on 1H 2018’s result

As of the end of 1H2018, BMP had almost no growth over the same period last year in most of the key indicators such as output, sales and EAT, completing over 40% of the year guidance. Given the seasonality of the construction materials sector, BMP's 1HFY2018 results turned out to be within expectations.

Equity Markets Correlation and Currency Volatility

We notice that in the past six weeks correlations between the VN Index and other equity markets has somehow evolved. In June the correlation between the VN Index and the MSCI Frontier Market Index was around +52% It has now decreased to a negative level of 20%.  Noticeably the correlation with the S&P 500 has risen to 30%.

Tariffs and Trade

The bottom line is that so far trade tariffs have not noticeably impacted overall global growth. However, there are no signs that the US and China are any closer in finding any agreement on the issue. The likelihood is that the dispute will run beyond the November US mid-term elections. Politically Mr. Trump is in a weak position following many by-elections where the Republican Party lost ground in key states that it controls, notably Ohio and Kansas.