Coronavirus likely to send local stock market crashing

A new strain of coronavirus that has emerged in the central Chinese city of Wuhan is expected to continue dampening investor sentiment, according to various reports.

Coronavirus likely to send local stock market crashing

Tourists wear protective masks while visiting Hoan Kiem Lake in Hanoi, Vietnam on January 31, 2020 – PHOTO: REUTERS

Concern regarding the novel coronavirus continued to have a negative impact on the VN-Index of the Hochiminh Stock Exchange as it dropped 2.4% on Friday to a 50-week low of 936.62 points.

In the Lunar New Year or Tet-shortened week’s two days of trading, the index plunged 5.3% and also declined for the third consecutive month as it fell 2.5% in January.

Dairy producer VNM was the major drag as it plummeted 7% to a 34-month low. Airlines VJC and HVN experienced steep declines of 7% and 6.9%, respectively, for the second day in a row.

On the positive side, pharmaceutical company DHG surged by 7% to a six-month high.

BIDV Securities Company said in a report on Friday that the Wuhan coronavirus outbreak is forecast to have the most adverse impacts on tourism and its related industries.

Apart from the obvious short-term negative impact on industries, such as aviation, seaports, shipping, and retail, the brokerage firm noted that the fisheries and real estate sectors may be negatively affected in the medium term.

Meanwhile, stocks in the pharmaceutical industry, including DHG and DBD, may benefit in the short run, according to the firm.

Echoing the view, Viet Capital Securities said that as concerns regarding the outbreak remain, the company believes they will have a negative impact on aviation stocks, including ACV, VJC, HVN and AST, as their earnings exposure to tourism is high.

According to the Vietnam National Administration of Tourism, Chinese arrivals accounted for 32% of total international arrivals by all modes in Vietnam last year.

 

The Vietnamese Government has now stopped issuing visas for Chinese tourists in an attempt to stop the spread of the deadly respiratory disease. Additionally, cross-border trade activities and tourism between Vietnam and China are not encouraged as the outbreak is spreading rapidly.

In a report, analysts at ANZ Research said the drop in economic activity in mainland China due to the virus will be felt across Asia through tourism and trade channels since businesses and factories in the mainland close due to internal travel restrictions amid the crisis.

ANZ Research predicted Vietnam would see a 0.44-percentage point drop in its economic growth considering its high exports to the northern neighbor.

S&P Global Ratings said as to potential regional and global impacts, the scale of the effects depends on the extent to which the virus spreads outside China.

“Even if contained, we expect some spillover to Asia-Pacific, given that Chinese tourists represent a large proportion of arrivals for economies including Thailand and Vietnam, among others,” said U.S.-based ratings agency.

The World Health Organization on Wednesday expressed concern over the person-to-person spread of the virus in three countries, including Vietnam. On Saturday, the Southeast Asian nation confirmed its sixth case of coronavirus.

Reuters reported that China’s new confirmed infections from the coronavirus outbreak increased by a daily record, up by 2,590 cases on Saturday to top 14,000. The death toll from the coronavirus outbreak in China had reached 304 as of the end of Saturday, state broadcaster CCTV said on Sunday, citing the country’s National Health Commission.SGT

Hanoi authorities spray schools with disinfectant to combat nCoV infection

Hanoi authorities spray schools with disinfectant to combat nCoV infection

Schools throughout Hanoi have made efforts to clean their facilities with disinfectant spray on February 1 as a means of fighting against the potential spread of acute respiratory disease caused by the new coronavirus (nCoV).

Vietnam declares novel coronavirus epidemic

Vietnam declares novel coronavirus epidemic

Prime Minister Nguyen Xuan Phuc on February 1 signed Decision No.173.QD-TTg, declaring the acute respiratory disease caused by the new coronavirus (nCoV) an epidemic in Vietnam.

 
 

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