The broad and the narrow approach.
TPP specific stocks would run straight away on a successful vote – The narrow approach suggests that mid to larger cap related stocks such as HSG; TCM; VHC; HVG and TTF will be favored by investors. Plus some smaller caps plays such as SHI; KBC APC KMR TNG and DQC. These cover a range of export industries and then some supporting plays. We also suggest that other unlisted or micro-cap industrial park; textile & garment; wood industry and seafood stocks will run on the story. That’s almost a given.
Broader market will also benefit from asset allocation decisions once a timeline for TPP signing emerges – The second theory suggests that the broader market will run on the theme also given
- The profound macroeconomic implications for Vietnam in terms of inward investment and opening up the economy further;
- Fund asset allocators will sit up and take notice of this and perhaps increase frontier and regional fund weightings for Vietnam.
In other words such a major shot of adrenaline will affect all stocks especially the large and liquid blue chips. Where there is still room obviously. Although the premium on selected FOL (foreign ownership limit) full issues such as VNM might also widen. The FOL theme will also likely be revived as investors speculate that a TPP deal will give tremendous momentum to the need to provide market access for foreigners.
These submissions are extracted from reports accomplished by Ho Chi Minh City Securities Corporation (HSC)’s Research Division team led by Fiachra Mac Cana, Managing Director, Head of Research
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