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Aviation stocks as soon as the Corona epidemic is successfully controlled

Aviation stocks as soon as the Corona epidemic is successfully controlled

Thursday 06, 02 2020
Vietinbank Securities has just issued a report recommending investment in Corona translation with lessons learned from the SARS epidemic in the past.

Vietinbank Securities believes that the bottom-fishing signal will come

When the first country announces a successful epidemic control (SARS: Vietnam is the first country to announce a successful epidemic control), the market recovers and goes up.

Vietinbank Securities has just issued a report recommending investment in Corona translation with lessons learned from the SARS epidemic in the past.

Specifically, the Corona Virus with the genome sequence is reported to be between 75 and 80% of the genome sequence of the SARS virus. Therefore, considering the stock market movements during the SARS outbreak can bring certain valuable lessons to investors.

Currently, international experts rate the Corona virus epidemic as compared to the previous SARS epidemic: Corona is more contagious but milder because the virus is lethal but the mortality rate is 3.5%, while WHO estimates that SARS has a mortality rate of 14% to 15%.

The global stock markets are affected by SARS

The chart below shows that the stock market was also affected by the SARS epidemic, counting from the time the market broke out looking for a bottom in about 3-4 months. The market created a bottom in April 2003, coinciding with the time when Vietnam was the first country to announce a successful outbreak. The average reduction rate of the 3 main markets is about -16%.

Vietinbank Securities recommends that in the short term (as in SARS, the bottom time of 3-4 months), the stock market will be negatively affected by the Corona epidemic. The nearest strong technical support is around 900 points.

The bottom-fishing signal will come when the first country announces the successful epidemic control (SARS: Vietnam is the first country to announce the successful epidemic control), the market recovers and goes up.

Recommended portfolio structure during the Corona outbreak

Recommended portfolio structure during the Corona outbreak

​According to the chart of Hong Kong stock movements when the SARS pandemic occurred, the financial sector tended to decrease slightly by -2.04% while the epidemic occurred and increased well by 39% when the market recovered.

Meanwhile, the real estate industry was heavily affected by a decrease of -17.4% while the epidemic occurred and a strong recovery of 61% when the epidemic ended. Although the momentum of increase/decrease includes the influence of other factors, here are some good experiences to draw.

Vietinbank Securities recommends investors to consider the structure of stocks into financial sectors such as CTG, MBB. Investors who prefer bottom fishing may consider joining the market to catch the bottom of stocks which tend to rebound strongly when the country announces the successful epidemic control: stocks of resort real estate, aviation.

>> Vietnam aviation industry: foreign ownership to increase

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Business Stock Market

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