Sensitive resistance 520

Market has been trading at the sensitive resistance where the boundaries between strong increase and strong decrease are very close.

·         During the transaction date, 28 May 2013, at least once the VN-Index tested the resistance level, 518, but it could not sustain overcoming this point.

·         Liquidity is necessary for the market to break out technical resistance, and fortunately the liquidity being provided by the local investors is good.

·         In addition, two exchange traded funds (ETFs) are restructuring their portfolios within the coming fortnight. Typically portfolio adjustments can enhance liquidity.

·         Our research show that during portfolio restructuring time, value and liquidity of the Vietnamese indices often have potential to go up and the average level is 1.46% and 27.06% respectively.

·         We have been writing a forecast of the VNM ETF list. Below is the forecast of DB ETF list for the next review:

o       Net asset value of  funds: USD $358.54 million

o       Stocks likely to be removed:

PGD (holding 906.414 shares)

NTL(holding 3.512.473 shares)

o       Stocks are likely to be added:

PET

CSM

PPC

o       Stocks are likely to be added but, it need to consider the room for foreign investors: EIB has fulfilled all the requirements but, its room is at 2.07% at present, which means 0.07% more than the ETF regulation.

·         According to technical analysis, the probability that the VN-Index crosses the resistance point of 520 is high.

·         On the RSI chart, the technical progress has been repeated like previously in 2009. This is approaching the first time in several years..

·         If crossed successfully at 520, the next target in short term of VN-Index will be 550

·         Clients wanting to participate in the market should pay attention to two stock groups:

o       Stocks that are appearing to trade undervalued: BTP, DQC, KHP, PGS.

o      Stocks that might be added by the two ETFs, or see their proportion increased in the assets held in the ETFs, as well as looking for positive technical signals. There are three (3) stocks that met this requirement:

           VIC (target at 78), VCB (target price at 34),  ITA (9.0)

The forecast quantity to be added in three (3) stocks may be reviewed, versus the forecast VNM ETF (issued on 24 May 2013). For private clients, buying level may be more, or less than the estimated ETF buying percentages, depending on the accepted risk of clients.