Monday, August 10 2020

VietNamNews

VN stocks to keep falling on disease fears

Update: February, 03/2020 - 07:08

 

A VPS Securities Co office. Vietnamese shares will return to action on Monday amid concerns related to diseases and movements in neighbouring markets. - Photo tinnhanhchungkhoan.vn

HÀ NỘI – The Vietnamese stock market has been forecast to fall next week amid fears of coronavirus and a focus on pharmaceutical stocks.

Việt Nam’s benchmark VN-Index on the Hồ Chí Minh Stock Exchange returned to action on Thursday after the one-week Tết (Lunar New Year).

However, market sentiment was dampened by fears of the potential breakout of the coronavirus. This also forced the Chinese market regulator to close the stock market until Monday.

Fears about the disease triggered large-scale sell-offs on the Chinese and Vietnamese markets. The VN-Index fell a total of 5.53 per cent on Thursday and Friday – the only two trading days of the post-Tết week – to end at 936.62 points.

The two-day decline also wiped out the entire growth the VN-Index during the three weeks prior to the national holiday. 

On the Hà Nội Stock Exchange, the HNX-Index dropped nearly 3.70 per cent in two days to end last week at 102.36 points.

The sell-off on the Vietnamese market targeted many firms who depend fully or partly on trade and travel activities.

Those companies included dairy producer Vinamilk (VNM), steel producer Hoa Phat (HPG), aviation firms Vietnam Airlines (HVN) and Vietjet (VJC), airport operator ACV (ACV) and PetroVietnam Gas (GAS).

VNM, HVN and VJC plunged between 6.87 per cent and 7 per cent, while HPG and GAS lost 4.7 per cent and nearly 6 per cent.

According to securities firms, the short-term outlook for the Vietnamese stock market was poor, and further declines were expected.

The short-term and medium-term scenarios for the VN-Index were worsening, Bảo Việt Securities Co (BVSC) said in a report.

The VN-Index may drop to 936 points, the company forecast, adding the benchmark could fall to 910-920 points if market did not improve.

BIDV Securities Co (BSC) said the movement of the Vietnamese stock market would depend on Chinese markets when they returned on Monday from the national break, but outlook was dim following reports of another bird flu breakout in China.

The diseases would weigh on market sentiment this week until good news was delivered to balance and support the indices, the company said.

Positive look

There are some positive signals investors may take amid the bad news.

Pharmaceutical stocks are rising as disease fears have boosted demand for healthcare products and services, thus lifting demand for shares.

Some big gainers in the pharmaceutical and healthcare sector were DHG Pharmaceutical JSC (DHG), Hà Tây Pharmaceutical JSC (DHT), Imexpharm Corporation (IPM) and Domesco Medical Import Export JSC (DMC), which rose between 6.4 per cent and 7.0 per cent on Friday.

In addition, high January CPI – an indicator showing the domestic purchasing power – meant consumer firms would profit in the first quarter as demand for goods increased sharply in the first month of the year. – VNS

Send Us Your Comments:

See also: