Market Strategy Report

Post-pandemic rebounds

Post-pandemic rebounds

Fundamentals continue to be improved

Positive in the medium term

Opportunities ahead

Back to the starting line

Calm and firm amid volatile period

Economic downturn for most 2Q

We raise our 2019 year-end range for the VN-Index to 970-1,010 from 940-1,000 as rate cuts from central banks and a partial US-China trade deal improve market conditions. Although we are looking for quieter performance in 4Q, this will likely only be a pause for the market and our outlook remains positive. Sectors we view as Positive include: power, IT, and retailing but are more selective for banks in 4Q. We are Neutral on industrial parks. Any sustained move above 1,000 in 4Q likely capped. As sentiment peaks for these events, we do not rule out short-term moves above 1,000 but concerns of a standstill in US-China trade talks, disappointments on Fed rates cuts, and growing evidence of a global slowdown in 2020 are likely to continue to weigh on market sentiment in 4Q and limit any gains. Large caps should continue to lead the market and our expectations for an unexciting 3Q earnings season for the lagging mid-caps will likely make it difficult for performance to catch up with large-

Q2 business results were more positive than those in Q1, and went beyond market’s expectations There was a surge in the revenue growth of large cap companies, which was also the main force of growth for the whole market in Q2 The overall profit margin was still at a good level