The VIX

Volatility is back so we look at what exactly that the VIX measures and what to make of it.

REE – Target for 2018 is still conservative

While setting a target of flat earnings for 2018, we believe that their NPAT could grow by over 20% versus 2017. In addition, the rise in 2018 earnings would come from three key business segment including M&E, Utilities, Office Leasing and Real Estate Development.

EU- Vietnam Free Trade Agreement

After 6 years, the EU-Vietnam FTA (EVFTA) will be signed hopefully by the end of 2018. Before looking at our assessment of the EVFTA’s impact on Vietnam, there are a few things to notice:

• The EVFTA is the second biggest benefit that Vietnam can expect after the US withdrew from TPP.
• The EU sped up the process of negotiating and signing FTAs with some regional countries in Asia, such as Japan, Singapore, etc.
• The EVFTA is split into two separate ones: the Free Trade Agreement and the Investment Protection (IP) Agreement because the issues of human rights in Vietnam. Although the Free Trade Agreement shall include the entire contents of the deal, the Investment part consists only the Liberalization of foreign direct investment.
• Vietnam is still under the impact of the EU’s yellow card over illegal fishing.

HPG- AGM on 22/03/2018: Medium-term Growth Motive is Small Scale Projects

On March 22^nd , HPG will hold its annual shareholders' meeting to pass resolutions on profit distribution, plan for fiscal year 2018 and update its operations. We think this is an important stage for Hoa Phat as it is carrying out many remarkable projects at the same time. In particular, the USD 2 billion steel complex in Dung Quat, Quang Ngai, is under construction and scheduled to start operation in Q3/2018 while the Mandarin Garden 2 apartment is being handed over to customers and a series of other agricultural projects are underway at the same time.

Overview of Chinese Outbound Tourism

China's outbound tourists are still less than 10% of the country's total population, and only 10% of the population hold the passports, which suggests huge potential in China’s outbound travel market. Vietnam, as a rising popular destination, should benefit greatly from it.

MWG: All eyes on Bach Hoa Xanh

MWG’s annual general meeting focused on answering investors’ questions on thegioididong’s recent decline and plans for Tran Anh as well as An Khang. More importantly, Bach Hoa Xanh is still the main subject as its success will decide MWG’s future growth.

Changes of global equity markets

• The MSCI World Index bottomed twice at around the 700 level in the past fifteen years. It is currently at around 2200 -see chart below.
• The first bottom occurred in March 2003, following a 2-year drop from the 1400 level. Valuations, bankruptcies and investors’ disillusions with the technology sector in general drove the index down from its peak in 2000.

HAX – Opportunities from Decree No. 116

Decree No.116 and Circular No. 03/2018/TT-BGTVT are aimed at limiting the number of imported cars by requiring the buyer to have a copy of the Vehicle Type Approval (VTA) certificates, which seems not to exist in many countries. In the first two months of 2018, the number of Completely Build-Up (CBU) imports contracted by 96%. Vehicles with less than 9 passenger seats saw a big fall, declining from 9,000 cars in the first two months of 2017 to only 40 cars during the same period so far in 2018.

PVD - Business Update

In 2017, PVD recorded VND3,902 bn in revenue, down 27.2% YoY due to a drop in drilling services as PVD V had no contribution. Meanwhile, NPAT decreased by 79.8% to VND26,1 bn. However, If excluding the revert from Science and Technology Fund, the company incurred a loss of VND479 bn in 2017

Overview on Insurance Sector 2018

Vietnam insurance market continues to record a double digit growth above 20% in 2017. This is the evidence showing that insurance sector benefits from economic growth fostering by strong investment in infrastructure and personal consumption.

In 2017, non-life insurance shares witnessed little positive movement while investors shifted their focus on life insurance share BVH. The fact that life segment surpassed the non-life one in terms of preimium growth in 2017 can partially explain this practice. Moreover, after growing hot in two previous years and facing a challening year 2017 with many natural disaters, shares on non-life insurers were not very attractive.

TCM - Wait for room-expanding issue to be solved

Investors are expecting a bright future for domestic textile manufacturers, especially Thanh Cong Group (HSX: TCM), who operates in a fully vertical value chain including yarn, fabric, and garment. As for TCM, we believe that benefits from the CPTPP in the short run are unclear.