16.04.2021

Korea Investment Management Co., Ltd.

VN Market Weekly Commentary – 9th April 2021

VN Index continues strong above 1,200, closed last week at 1,231 gaining 11.6% YTD. Market liquidity recording new highs reaching US$ 789m level. Foreign investors are trading actively, turning net buyers since the Tet holiday. Fubon ETF listing on April 19 helped the inflow. Corporate earnings due beginning last week of April. Optimism is strong. 

Following last week’s positive sentiment after breaking through the 1,200 historic mileage, the VNIndex closed the week at 1231.7, another record high, posting a moderate gain of 0.57% WoW and increasing the YTD return to 11.6%. Information Technology (+2.6% WoW), Brokers (+2.2% WoW), Banks (+1% WoW), and Materials (+1.0% WoW) led the gains, while Consumer Staples (-1.7% WoW), Energy (-0.9% WoW), and Utilities (-0.7% WoW) trailed behind.   
Foreign trading turned to positive also helped to give a boost in this week’s gains. Market liquidity logged a fresh record high, reaching to US$789m level (on Friday), vs. the previous week highs of US$710-750mn. Foreign investors traded actively, turned to net buying position of US$93.8mn for the first week since the Tet holiday. Among those is the new launched ETF by Fubon (Taiwan) with its initial IPO size of US$180-200mn, will list their shares on 19 April, likely started to build their portfolio from this week. We observed that this has well-supplied fuel for several large-cap names, including VIC (+1.5%), VHM (-1.8%), VRE (+3.4%), HPG (+1%), MSN (-0.7%), NVL (+9.8%), partially helping to push market sentiment. Domestically, the number of newly opened accounts in March was released at 113,875 accounts, posting more than 100,00 accounts per month for the first time in history, which represents local retail money remaining strong and continuously flowing into the stock market.    
1Q2021 corporate earnings continued to be a key contributing factor for stocks to drive the index up. 1Q earnings season will be kicked off in the last week of this month. But so far, we saw the banking, brokers, and materials sectors have released strong preliminary earnings results. With a strong start from the first quarter’s earnings, the second quarter’s growth will highly continue as a lower base from last year, this is strengthening investors' confidence that there may have an upside to the current corporate earnings growth level of the overall market this year. At the current level, VNIndex is traded at forward PER of 15.4x on 2021 earnings growth of +25% YoY, which is still below its 5-year average level of 16.0x and has a chance for being re-rated, implying a decent upside for all investors.

KIMVGIU LX Equity and KIMVGIE LX Equity are recording resilient alpha vs the FTSE and the VN Index. Reach out to us to hear the most recent updates and our outlook for the remainder of the year!
Allan Kim       kimfunds@koreainvestment.com

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