Weekly Market Roundup: Technicals take over at 800

Weekly — April 27

The VNI closed down -1.6% last week to reach 777 points after a steep -4% drop on Tuesday – the mainboard actually rose every other day of the week. A correction is reasonable given sharp recent gains and the VNI’s approach to the 800-point line on Monday’s close of 795 – the highest level since the high-volume 5% selloff of March 12. Market breadth shifted back to negative, although not to the extremes of March.

VNINDEX: 777 (-1.6% WoW / -19.2% YTD / -20.5% YoY)
 HNINDEX: 107 (-3.2% WoW / +4.4% YTD / -0.2% YoY)
 UPCOM Index: 51.7 (-1.0% WoW / -8.7% YTD / -7.8% YoY)
 Average daily turnover: US$192mn (+10% WoW)
 Foreigners net sold US$73 million of the 3 indexes’ constituents.
 VND:USD rate: 23,502 (-51bp WoW / -140bp YTD / -121bp YoY)

Market breadth shifted negative after two very bullish weeks, with 206 losers vs 158 gainers among VNI components. Breadth on the VN30 stocks was far worse than the broader VNI, with just 7 stocks rising vs 23 losers. Again, this illustrates the continued FINI selloff.

Vingroup shares led the market lower, with VIC (-3.2%), VHM (-5.1%), and VRE (-9.4%) dragging down the market, with select full-FOL banks such as TCB (-3.7%), MBB (-5.6%), and VPB (-4.4%) adding to the index decline.

Weekly gainers included HPG (+6.8% WoW), which continued its recent recovery, and VNM (+3.5%), which announced a stock buyback of 1% of outstanding shares on April 23.

Market view. The failure to broach 800 points on the VNI provides a further illustration of who has been supporting the markets YTD: domestic investors. The local penchant for technical analysis (and, more broadly, “big numbers” such as 800) suggests that overcoming this level may prove difficult until foreign net selling turns into buying. That said, with national social distancing policies beginning to ease from April 23 and the IMF forecasting 2.7% GDP growth for Vietnam in 2020 (i.e., the highest level in emerging Asia), we think it just a matter of time before the persistent foreign fund outflows reverse.