1TABLE OF FIGUREFigure 1: Global economic growth...6Figure 2: Contribution of some economies and economic sectors in global GDP...7Figure 3: Manufacturing PMI and Services PMI...10Figure
Choose at least two stocks listed on Vietnam Stock Market by applying the
Marco analysis
The world economy in the first half of 2022 has not been able to have a strong recovery momentum over the same period, the contraction or slowing has covered the globe, notably developed economies Although countries continue to make efforts to recover from the COVID-19 pandemic, the Russia-Ukraine conflict that began at the end of February 2022 and still has no end has put the global economy in new difficulties Accordingly, inflation escalates, the economy declines, food and energy security is threatened, raised concerns about the stagnation of the world economy in the late '70s.
Figure 2: Contribution of some economies and economic sectors in global GDP
The global economy in the first quarter of 2022 as well as in leading economies has performed lower than expected That situation worsened in the second quarter of 2022 when the prolonged Russia-Ukraine war brought many consequences, the outbreak of the disease inChina forced the Government of this country to apply lockdown measures in many major provinces and cities to pursue the Zero - COVID policy, which has exacerbated the supply chain disruption The outlook for global economic growth in 2022 has been continuously revised down significantly lower than the forecast given at the beginning of the year.Economic growth tends to slow in most economies, especially those in the eurozone, which has been hit hard by the Russia-Ukraine conflict Developing economies are forecast to grow4.1% in 2022, 0.4 percentage points lower than the forecast earlier this year, mainly due to higher energy and food prices, rising inflationary pressures and slowing growth in the UnitedStates, the European Union and China In addition, rising commodity prices have increased inflationary pressures, curbing demand in most economies.
Table 1: GDP growth rate in the third quarter of 2022 of some countries
Country GDP growth forecast in Q3/2022
Global production and service activities
Economic indicators paint a concerning picture globally The US manufacturing sector has seen a slowdown, while service activity has contracted for three consecutive months Europe's manufacturing sector has also experienced negative signals amid energy price pressures, resulting in simultaneous contraction in production and service sectors Japan's economy has struggled for stability, with its service sector PMI dropping below 50 points in August China's economy faces challenges from the pandemic and a troubled real estate market, hindering its recovery.
Despite concerns over the manufacturing sector's decline, as evidenced by the prolonged low PMI below 50, the service sector's resilience, particularly in tourism and entertainment, has partially offset this weakness.
Figure 3: Manufacturing PMI and Services PMI
In emerging economies, developments are somewhat more positive but also uneven, the most prominent of which is the strong pace of improvement of the Indian economy InSoutheast Asia, positive developments appeared in the whole quarter, the PMI in the manufacturing sector remained above 50 points, excluding Myanmar; Production conditions continue to improve, growth in the manufacturing sector is supported by new output and orders In particular, economic developments in Singapore, Thailand and Vietnam are highlighted.
Figure 4: Southeast Asia Manufacturing PMI
According to the latest UNCTAD statistical data, global trade since the beginning of the year, although there has been no reversal, the growth rate has slowed over the quarters The value of global trade has risen more sharply than the volume of transactions before the rise in prices, and increases have appeared for both trade flows of goods and services In particular, many commodity groups have exceeded the pre-pandemic growth rate and maintained an upward trend over the same period such as metals, clothing, agricultural foods, chemicals, textiles, However, there are also commodity groups that have decreased due to the impact of the epidemic and shortages in the supply chain and logistics stages such as the transportation sector, smart devices, vehicles,
Global trade is more positive in Asian countries such as Singapore, Indonesia, Malaysia or in major G20 economies such as Brazil, Canada, Australia, Germany and South Africa. Meanwhile, in the US, Europe and Japan, the trade balance has maintained a prolonged deficit, import and export activities are unstable, and a clear downward trend has appeared in August 2022.
Figure 5: IMF forecast: growth in global trade in goods and services
Amidst a tumultuous global landscape, the optimism surrounding FDI inflows has waned as geopolitical turmoil, financial instability, and soaring inflation cast a shadow over the investment outlook Forecasts suggest a deceleration in global FDI in 2022, with growth projections being revised downward While sideways growth remains a possibility, investment flows into sustainable development areas, such as agriculture, health, and education, remain sluggish This slowdown highlights the need for adaptability and resilience in the face of the evolving economic climate.
Inflation reached new heights in the first half of 2022 due to supply chain disruptions, labor shortages, and successive price shocks Despite exceeding central bank targets, inflation surged in emerging markets like Turkey, Argentina, and Brazil, and rapidly escalated in Central and Eastern Europe and the US However, August 2022 witnessed a cooling trend in inflation across most economies, fueled by decreasing oil prices and waning demand.
Figure 6: Inflation forecasts have been revised upwards in most countries
In the third quarter, commodity prices globally have tended to increase and decrease intertwined with lower volatility compared to the previous 2 quarters Accordingly, the prices of commodity groups almost simultaneously decreased in the first month, increased slightly again in 8 and turned down in September Specifically, the average price of energy commodities decreased by 7.8% and the non-energy group decreased by 10.3% In addition, businesses operating in many economies also confirmed that the price of input materials has decreased continuously in the past months as the basis for reducing the price of output goods.
The cooling signal has appeared more clearly in the group of food, food, crude oil, fertilizers, and manufactured metals.
In particular, the most notable development is the oil price with a prolonged decline for
3 consecutive months, the sharp decline in July has brought the average price of Brent andWTI oil to $ 90.16 / barrel and $ 83.87 / barrel At the end of September, WTI and Brent spot oil prices were $80.03 per barrel and $86.39 per barrel, respectively, with a decrease of more than 25% and more than 23% compared to the end of the second quarter, respectively.Meanwhile, the average price index of manufactured metals decreased in the range of 10% -33%, precious metals, food, edible oil and cereals fell by 9%, 10%, 17%, more than 6%,respectively However, commodity prices are still high, the decline in the quarter is strongly affected by weakening demand in the face of inflationary pressures and global economic difficulties.
Figure 7: Price index movements of some commodity groups
Figure 8: Average oil price movements
Although the global economy is showing signs of deterioration, the labor market is quite stable, the unemployment rate in other countries improved slightly, down about 0.1 percentage points compared to the previous quarter or remained stable, except for the US. Post-pandemic labor shortages have improved compared to the second quarter, with companies ramping up recruitment of skilled workers despite rising wage costs However, the recovery of
14 the labor market also varies between groups of countries and working ages A strong recovery will take place in developed countries while signs of slowing down or not reaching pre- pandemic thresholds appear in low- and middle-income economies Besides, the recovery rate of the young labor market is still slow, according to the latest forecast of the World Labor Organization, the total number of young workers without jobs has decreased slightly by about
2 million people compared to 2021 but is still 6 million more people than the pre-pandemic threshold.
Figure 9: unemployment rate of some economies
Economic outlook by the end of 2022
In the face of weak economic developments in the third quarter, international organizations continue to revise down their forecasts for global growth in 2022 compared to previous forecasts In general, the majority of forecasts say that the global economy is unlikely to show signs of recovery in the next quarter, the trend of contraction, or slowing improvement continues to appear in economic activities Global economic growth remains challenging amid political uncertainties and epidemics; risk of decline, inflation, also dominates In that context, the latest forecast for global GDP growth will decrease in the range of 2.4% – 3.2% from 6.2% in 2021, inflation risks and economic stagnation are still hidden.
Figure 10: Forecast of real global economic growth under the scenario for the period of 2019-2023
On that basis, the major economies in 2022 are forecast to have lower-than-expected growth, with the exception of Japan key economies such as Germany, Italy, France, all have declining prospects Other western economies, such as Britain, face a similar situation The US economy continues to face a slowdown in real growth, the economic recovery rate will be lower than last year but more positive signals will come in the fourth quarter for employment and consumption, Besides, China's economy continues to face many internal difficulties, it is likely that the growth of 2022 will not reach the set target Meanwhile, bright spots for global economic growth will appear in emerging economies of the Middle East, North Africa and Asia such as India, Indonesia, Vietnam, the Philippines and Bangladesh, Notably, the advantages of economies in the Asia-Pacific region with strong internal economic drivers,
16 effective regional free trade agreements, efficient supply chains and stable foreign capital flows.
Industry analysis
In the first 9 months of 2022, the total pre-tax profit of 28 banks reached VND 192,500 billion, up 39% over the same period in 2021 At the end of 3 quarters, 7 banks joined the group of banks with a profit of VND 10,000 billion, 9 banks with a growth rate of over 50%. Although there are also some cases where banks lose money, or growth slows down, but the number is only single The top 10 profits in Q3 are still quite familiar names, which are Vietcombank (24,940 billion dong), Techcombank (20,800 billion dong), VPBank (19,837 billion dong), MB (18,192 billion dong), BIDV (17,677 billion dong), VietinBank (15,764 billion dong), ACB (13,503 billion dong), SHB (9,035 billion dong), HDBank (8,016 billion dong) and VIB (7,800 billion dong) Some banks recorded a decline in pre-tax profit such as OCB (decrease by 10%), Kienlongbank (decrease by 42%), BaoVietBank (decrease by 21%).
Of the 28 banks listed, NCB is the only bank that recorded a loss in the first 9 months of 2022. The bank reported a loss of VND 180 billion while in the same period last year a profit before tax of VND 206 billion.
Table 3: Profit before tax of banks in the first 9 months of the year
STT Bank Profit before tax (Unit: billion VND)
Despite the positive growth in the past 9 months, according to experts, the profit of the banking industry in 2022 and 2023 will be difficult to maintain high growth like in the period of 2020 and 2021 The reason is room credit growth is not much as credit will still aim to increase 14%/year Meanwhile, NIM is under pressure because input interest rates tend to increase, but lending interest rates are difficult to increase accordingly Moreover, from the beginning of October this year, the reduction of the ceiling on the ratio of short-term capital for medium and long-term loans from 37% to 34% may also increase the cost of capital of banks due to the need to increase long-term deposits resulting in higher capital costs.
In addition, from the second quarter of 2022, the rate of demand deposits at many banks decreased because cash flows from current accounts tended to shift to term savings channels to enjoy high interest rates due to high interest rates Investments such as stocks and real estate slowed down This may cause the net interest income of banks to shrink, which is the main source of income for profits Moreover, a large amount of capital of banks is stuck in bad debt, including restructuring debt, making a large amount of credit unable to be brought to the economy.
Source: Financial Statement – AAS Research
Source: Financial Statement – AAS Research
Despite the majority of banks maintaining bad debt ratios below 3%, or even below 1%, a steady upward trend in NPL ratios has been observed from Q1 to Q3 While loan restructuring is projected to elevate NPL formation in the latter half of 2022, indicators of credit quality are anticipated to remain manageable Post-COVID-19, the State Bank reported a 1.9% bad debt ratio on the balance sheet as of August Banks are actively implementing debt recovery initiatives, utilizing provisions, and seeking domestic and international investors to revitalize bad debts, mitigating the predicted risk of defaults caused by pandemic-induced business losses.
Source: Financial Statement – AAS Research
This year, the global economy is still pressured by inflation In October 2022, the world economic recovery slowed down more clearly in the context of escalating inflation. Manufacturing in the US, Europe, China narrowed concerns about the risk of recession increased; Inflation is high in many countries Central banks tightened monetary policy more aggressively and signaled tough in controlling inflation Domestically, the average 9-month inflation is 2.73%, of which the average core inflation in 9 months is 1.88%, significantly lower than the general inflation However, general inflation and core inflation increased rapidly, showing that inflation pressure is becoming more and more obvious in the context of the second round impact of input commodity prices on other commodity groups, along with a strong recovery of the economy consumer demand The State Bank of Vietnam continues to implement policies to control inflation according to the target.
Table 4: Core inflation in September and 9 months of 2020-2022 (Unit: %)
Core inflation in September compared to the previous month
Core inflation in September compared to the same period last year
Core inflation in 9 months compared to the same period last year
Assessing the prospects of banks in the last quarter of the year, Mr Nguyen MinhHoang, Analysis Director of Nhat Viet Securities Joint Stock Company, said that in the last months of the year, the overall banking group will maintain the The growth is relatively positive compared to the same period, because the same period in the third quarter and the fourth quarter of 2021 was affected a lot by COVID-19 conditions, with such a low background, there is still growth this year For the whole year of 2022, the banking group is still a group that maintains a good growth rate of over 20% That is one of the prospects we can assess despite issues such as deposit interest rates increasing, but in the fourth quarter output interest rates are also starting to show signs of inching up, it will make reduce the impact of NIM on the profitability of banks Besides, enterprises that are less affected by bonds and have a large CASA ratio will also have advantages.
Company analysis
TPB – Tien Phong Commercial Joint Stock Bank (TPBank)
Stock ticker on the exchange: TPB.
Charter capital of the enterprise: 11,716.72 billion VND.
The floor price of TPB shares: 32,000 VND.
TPBank, established in 2008, aspires to be a transparent and sustainable financial institution, leveraging modern technology, market expertise, and the financial strength of strategic shareholders These include DOJI Gold, Silver and Gems Group, Industry Corporation FPT Technology, International Finance Corporation (IFC), Vietnam Reinsurance Corporation (Vinare), and SBI Ven Holding Pte Ltd., Singapore Financial Group.
TPBank always strives to bring the most effective banking and financial solutions and products, targeting the young and dynamic customer segment Based on advanced technology platform and in-depth management level, with the goal of leading in digital banking, TPBank has focused on investing in modern infrastructure, advanced technology solutions with breakthrough products breakthrough, helping TPBank become the first bank with a diversified and outstanding digital banking ecosystem in Vietnam.
With the brand statement "Because we understand you", TPBank wishes to take the foundation of understanding customers to build a style of top quality banking services
TPBank had outstanding and impressive business results in the first 9 months of the year in the financial statements published on October 20, 2022, with safe and strong performance indicators TPBank has completed 72% of the full-year profit plan with accumulated pre-tax profit of VND5,926 billion, an increase of VND1,532 billion over the same period.
Profit after tax in Quarter 3, 2022 reached VND 1,712 billion, up 54.22% compared to quarter 3, 2021 In which, net interest income contributed mainly to the profit result of the third quarter of 2022 with VND 2,741 billion, up 16.84% over the same period last year Net profit from service activities reached VND 684 billion, doubled compared to the same period in 2021 and 2.5 times higher than the third quarter of 2020 due to the impact of the covid epidemic on the service industry leading to net profit from service activities have low background in 2 years 2020 and 2021.
Provision expense for credit risks in the third quarter of 2022 decreased by VND 1,017 billion compared to the same period last year, showing that TPBank has well controlled bad debts and increased profits for the Bank itself.
Table 5: Business performance of some operations at TPBank in the third quarter of 2020,
Net profit/loss from service activities 683.797 357.770 258.020
Net profit/loss from foreign exchange business 118.468 -44.673 82.180
Provision expense for credit risk 328.474 1.345.615 415.991
With the pioneering in applying Basel III standards, the capital adequacy and liquidity indicators are strictly managed by the bank Capital adequacy ratio according to Basel III (CAR) as of June 30, 2022 reached 12.25% and the loan-to-deposit ratio (LDR) as of the end of September reached 60.91% In addition, early compliance with Based III also helpedTPBank to receive a high credit rating twice in less than a month by Moody's In the comparison table assessing the liquidity risk response ability of 17 listed banks based on 6 criteria of VnDirect, besides Vietcombank, Techcombank, HDBank, MSB , TPBank emerged as leading 3/6 of the criteria solstice With the ability to meet liquidity obligations well and the current abundant liquidity in the banking system, according to observers, investing in corporate bonds is not a concern.
Amidst industry peers, TPB exhibits strong operational performance with elevated EPS and a favorable P/E ratio conducive for investment However, the rapid surge in Vietnamese stocks during 2021 resulted in a significant rise in both indices Post-Q3 2022, EPS and P/E experienced a steep decline, mirroring the volatility in Vietnamese and global stock markets.
With this ROE, it shows that the business is operating very efficiently Having both abundant capital and effective operation on both that capital, although there was a slight decrease in the last months of 2021 and early 2022, the business quickly recovered and ROE in the third quarter of 2022 had better transformation The high ROE over the years shows that the Bank's solvency and capital turnover is very stable ROA is average, showing that TPB is likely to bring profits to investors in the future.
3 Reason for choosing stock symbol:
TPBank stands out in the market with its resilience against interest rate fluctuations, maintaining its credit growth potential Additionally, its digital banking capabilities enable it to expand its customer base, particularly in the retail segment, ensuring sustainable growth and a competitive advantage.
The movement of TPB stock in the market is considered hopeful During the last 1 year, most of the stock prices in the banking sector have moved sideways, but TPB still tends to increase thanks to its profit outlook and superior profitability ratios compared to the whole industry So it can be said that this is a bank with promising growth prospects and TPB stock has a lot of potential for investment.
Despite recent market declines, TPBank (TPB) shows potential for long-term investors While short-term investments remain uncertain, TPB's strong fundamentals, liquidity, improved asset quality, and digital banking leadership position suggest promising growth prospects Its solid foundation positions TPB as a potential stock for long-term investment, رغم التقلبات قصيرة المدى التي يشهدها السوق.
Saigon Thuong Tin Commercial Joint Stock Bank_Sacombank:
Stock ticker on the exchange: STB
Line of business: Finance – Banking
Charter capital of the enterprise: 18.852.157.160.000 VND
The floor price of TPB shares: 34.100 VND
- Saigon Thuong Tin Commercial Joint Stock Bank was established under license number 0006/NH-GP dated December 5, 1991 by the State Bank of Vietnam with a starting capital of 3 billion - On December 21, 1991 officially came into operation with initial charter capital of 3 billion VND by merging Go Vap Economic Development Bank and
3 credit cooperatives Tan Binh, Thanh Cong and Lu Gia After 19 years of operation,Sacombank has increased its charter capital to 9,179,230,130,100 VND (as ofDecember 31, 2010).
- STB is one of the private banks with the largest total assets The bank focuses on lending for homes, cars, household businesses, and small and medium-sized businesses.
STB made history in 1996 by becoming the first bank to issue public shares, boosting its charter capital to VND71 billion and attracting nearly 9,000 shareholders A decade later, STB achieved another milestone by listing its stock on the HOSE stock exchange under the code STB, making it one of the first banks to do so Additionally, Sacombank expanded its operations in 2006 by establishing affiliated subsidiaries: Saigon Thuong Tin Remittance Company (SBR), Saigon Thuong Tin Financial Leasing Company (SBL), and Saigon Thuong Tin Securities Company (SBS).
- After 30 years of construction and development, Sacombank is currently in the top 3 best banks in Vietnam In 2022, the bank is expected to write off all problem assets, compared with the original plan, which happened three years earlier This will help STB stock which is expected to achieve a sudden profit in a short time.
Recognizing that the potential of Vietnam's retail banking market is still very large, and at the same time identifying the strength of the network spanning three countries Vietnam - Laos
- Cambodia, with the technology system that is focused on investment, the staff With the youth and enthusiasm, Sacombank will surely soon realize the goal of the leading modern and multi- functional retail bank in the region in the journey of reaching out
Determine the optimal risk portfolio
Daily adjusted closing price data income of 2 stocks and VNindex from 01/01/2020 to 13/11/2022
Date Close Price Rate of return
TPB STB Vnindex TPB STB Vnindex
This is a part of table The rest is in the attached excel file
Calculate the daily rate of return of each stock and vnindex
= With: Pt : Price of stock in t.
Pt+1: Price of stock in t+1. rt : Rate of return of stock in t.
Calculate the expected rate of return of the two stocks and the Vnindex
Calculate the expected rate of return, using the statistical functions AVERAGE of the rate of return of each stock.
Calculate the covariance and correlation of the two stocks
Using the Covar statistical function to calculate the covariance; the correlation coefficient using the formula:
Draw the minimum variance frontier and point out the efficient frontier
First, we have to find the portfolio with the least risk by:
Step 1: Given an arbitrary value of W1 (TPB weight) and W2=1-W1 (STB weight) and calculate the risk value of the portfolio just given.
Step 2: Use the solver function in excel to find a new portfolio with a risk value
- By changing variable cells: select the density series Wi
The expected rate of return of the two stocks and the
→ Click Solve (you will see �p change) → copy the calculated �p data into the data series table [E(Rp); �p]
Second, draw the minimum variance frontier
Step 1: Let the value w1 run arbitrarily from 0 to 100% with a step 2%.
Step 2: From the weights just given, calculate the expected rate of return, the risk of the portfolio corresponding to each pair of weights according to the formula:
Step 3: After having the risk-return pairs, go to Insert, select Scatter and select Data to draw a chart with �p: horizontal axis, E(Rp): vertical axis.
The portfolio with the smallest variance in the population is the portfolio with = 0.0942% and = 2.3226% With the weight of TPB (65%) and STB (35%).
The efficient frontier is the upper part of the minimum variance frontier (starting at theMin point) representing efficient portfolio.
If you had 100 million dong, how would you invest? Suppose that risk-free rate is 8%
We are investing in a portfolio of 2 risky assets (TPB&STB) and 1 risk-free asset with rf=8% The problem is to find the portfolio with the most optimal risk (highest Sharpe coefficient).
Step 1: Suppose W1=W2P% Calculate the Sharpe for the portfolio with the smallest variance found above.
Step 2: Using the solver tool again, find the weights of the 2 risky assets with sharpe
Step 3: Calculate the weight of 3 assets in portfolio (including 2 risky assets and 1 risk-free asset).
Determine the proportion of risky assets: y=
The weights of the two risky assets in portfolio are:
The weights of the 1 risk-free assets: y*= 1-y
Given the risk aversion equal to 2, we get the result:
The mount of money (VND)
So if I have 100 million, I will invest in TPB securities with the amount: 30,962,491VND,26,927,392VND in STB securities and 42,110,117VND in risk-free assets.
IF YOU WERE A CONSULTANT IN INVESTMENT AND YOU
Demonstrate that your portfolio is better than the market portfolio (Vn-index)47 1 Calculate the Sharpe for the Vnindex
Use formula: Sharpe I.2 Compare the two slopes of the portfolio and vnindex
So portfolios are better than the market portfolios.
II If clients invested in your portfolio, when were they lender/borrower?
II.1 Draw the capital allocation line with the expected return and standard deviation of the combined portfolio
Step 1: Let the value y run arbitrarily from 0 to 200% with a step 100%.
Step 2: Calculate the expected return of the combined portfolio
Step 3: Calculate the standard deviation of the combined portfolio
Step 4: After having the risk-return pairs, go to Insert, select Scatter and select Data to draw a chart with �c: horizontal axis, E(Rc): vertical axis.
Variance frontier Minimum variance frontier Efficient frontier CAL σ(p)
Investor portfolios encompass both risk-laden assets and risk-free assets An investor's categorization as either a borrower or lender hinges on their personal risk tolerance.
The segment from y=0 to y0% is the set of all assets in the portfolio including both risky and risk-free assets (0