20160526_BSC_Vietnam Daily Review_EN_Retreat after slight recovery

Summary
VN-Index plunged after slight rebound at supportive MA 15. Cash flow continued to remain low and the majority of Bluechips were in red and sold strongly. Losers overwhelmed gainers. Despite that WTI stood at the top of 10 months, it couldn’t lift the whole oil and gas group. In contrast, the movement of penny stocks such as ATA, PTL, PXT and seafood and seaport stocks that we recommended were better than the overall market.

HNX-Index and UPCoM-Index movements were similar to VN-Index.
Market movements are irregular and inversely to interest rate movements. Interbank interest rates fell due to excess liquidity and SBV held net position on OMO for 4 consecutive weeks. Export from agriculture, fishery and forestry showed positive performance for the recent 5 months.

Recommendation
Overall market has stepped into short-term downtrend. Opening long position and predicting bottom in the context of lacking market information, declining Bluechips, low liquidity is very risky. Investors should continue to reduce portfolio weights and observing VN-Index movements when the index is approaching the next supportive levels at 598, 590.