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Analysts see opportunities for Vietnam in coronavirus crisis

There are always opportunities in misfortunes, according to Huynh Minh Tuan, brokerage director of Mirae Asset Vietnam.

The Vietnamese stock market started the new year 2020 with the VN Index jumping to the 990 point threshold and foreign investors buying continuously. The net purchase by foreign investors had reached VND2.117 trillion as of January 24.

 

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However, the net purchase trend stopped suddenly because of the coronavirus outbreak, and the succession of days of net sale began. In the last two weeks, their net sale hit VND1.5 trillion.

Tuan of Mirae Asset Vietnam said at a workshop on February 22, 2020 that foreign investors rushed to sell stocks for fear of the coronavirus outbreak, and that the shares sold are mostly ones with large capitalization value such as VIC, MSN, VNM and NVL.

Tuan stressed that the foreign investors’ net sale doesn’t mean foreign capital leaving from Vietnam. Instead, foreign investors are restructuring their investment portfolios and trying to increase the amounts of cash in the difficult time.

The Vietnamese stock market started the new year 2020 with the VN Index jumping to the 990 point threshold and foreign investors buying continuously. The net purchase by foreign investors had reached VND2.117 trillion as of January 24.

Asked about the impact of coronavirus, Tuan said the epidemic is having negative impact on many business fields, including aviation, real estate, tourism and F&B.


IATA estimates that the world’s aviation industry may lose $29 billion because of the epidemic. Meanwhile, Vietnam Airlines said it is losing VND250 billion in revenue each week.

However, Tuan believes that F&B, not aviation, is suffering the most. Having just been "stunned" by Decree 100 which imposes heavy punishments on drunk drivers, Sabeco, the biggest brewer, has suffered another shock from the Covid-19 epidemic.

Sabeco's revenue and share prices have plummeted.

Regarding the impact of the coronavirus crisis on the national economy, MPI said if the epidemic can be stopped in Q1, Vietnam would receive the GDP growth rate of 6.25 percent in 2020, or 0.55 percent lower than that set by the government’s Resolution No 1.

The growth rate would be 5.96 percent, or 0.84 percent lower, if the epidemic ends in Q2.

While the coronavirus outbreak has caused more than 2,000 deaths worldwide and seriously affected many business fields, it has opened up opportunities to others.

“Some business fields have the opportunities to become better,” Tuan said.

In current conditions, the government needs to support the economy with monetary and fiscal policies.

The government is expected to make investment in fields that need huge capital, especially infrastructure.

Tuan estimates that the total investment in infrastructure and public finance may reach VND500 trillion.

Tuan also mentioned the tourism industry, saying that as the number of travelers to China has decreased sharply and Vietnam can control the epidemic, it has the opportunity to become a tourism center in Southeast Asia.

Kim Chi 

 

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