The epidemic has shaken investors' confidence. After 3 months, Vietnam's stock market capitalization has loss USD 37 billion. In the coming time, it is hard to answer the question “Which motivation will help lift Vietnam stock market?”
Within the first 3 months of the year, a series of indices and equity capital of Vietnam stock market "evaporated". VN-Index hit 661 points on March 30’s session, which is a decrease of about 28% compared to 960.99 points on the last session of 2019.
Market capitalization of Vietnam stock market has suffered a loss of more than VND 886,420 billion, equivalent to USD 37.4 billion. Along with the “evaporation” of capitalization, the stock market has also witnessed many "red" sessions.
For example, on March 23, 363 stocks fell, of which 193 fell to the bottom. Investors fled and hundreds of stocks were bought by nobody. In the next trading session on March 24, VN-Index was only 659.21 points, the lowest in more than 3 years, equivalent to market capitalization of over VND 860,000 billion.
Experts say that the Achilles' heel of Vietnam's stock market was caused by psychological factors. In the context of complicated movements of the COVID-19 pandemic, it is difficult to maintain market stability.
Not only has capitalization been lost, the stock market is also experiencing many losses in terms of investment. Concerns about the effects of the COVID-19 pandemic, and negative impacts caused by the oil price war between OPEC and Russia dragging oil prices down have made the stock market in the world fall deeply over time.
The world stock market has dropped sharply, making investors wary of emerging stock markets like Vietnam. This is one of the reasons for the deep fall in Vietnam's stock market recently.
According to the KBSV Securities Company, the COVID-19 epidemic will have a much greater impact when global economy already showed signs of weakness previously. Central banks do not have much room to loose their policies, while the economic cycle has experienced a period of growth that has lasted more than 10 years since the last crisis.
"So far, the Covid-19 epidemic has made most economic forecasts no longer work. Therefore, taking a break from stock markets in developing markets would be optimal in the short term” KBSV experts acknowledged.
After the "red" week, Vietnam's stock market has shown signs of "recovery". The previous steep decline has slowed down under the positive impact from the world stock market and investors' sentiment started showing signs of optimism.
Many large-cap stocks such as Vingroup reversed, helping the VN-Index experience the strongest rally in 11 years on March 25 with an increase of about 4%. This strong increase comes from the rise of European and Asian stocks, creating a momentum for Vietnam's market. VN-Index sometimes increases vertically.
In addition, one of the factors helping the market to stabilize is that businesses have spent trillions of dongs buying treasury shares. The move is considered an emergency "prescription" to save stock prices, and increase the resilience of businesses to prevent the risk of acquisition.
Along with that, the authorities have issued many measures such as interest rate reduction package of the banking industry, reduction of land rents, delaying the payment of value-added tax, etc.
These solutions are "medicine" to reassure investor sentiment. Large-cap stocks like Vingroup helped VN-Index to gain points. Notably, SBT hit the ceiling price in 2 consecutive sessions after Mr. Dang Van Thanh decided to purchase 10 million shares of Thanh Thanh Cong Bien Hoa.
The move of foreign investors to end the chain of 33 consecutive sessions of net selling and return to net purchase of 30 billion dong on the market are creating hopes for investors. The purchase power of foreign investors was not too large, but it was a positive sign, reducing the pressure on investors in the current period.
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