Shares to correct on worries of virus surge

 Vietnamese shares may continue to fall this week as a spike in fresh coronavirus cases fuelled concerns that the path to economic recovery could be hindered.

Shares to correct on worries of virus surge
Outside the Ho Chi Minh Stock Exchange (HoSE). Signs of a resurgence in coronavirus cases in Viet Nam unnerved investors who were hoping for a swift economic recovery from the crisis. — Photo tinnhanhchungkhoan.vn


 
 
The benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) lost 0.34 per cent to end Friday at 798.39 points.

It had lost a total of 3.7 per cent last week.

An average of 310.4 million shares were traded on the HoSE during each session last week, worth VND4.9 trillion.

On the Ha Noi Stock Exchange, the HNX-Index slumped 0.55 per cent to end Friday at 107.51 points.

The northern market index had declined 1.7 per cent last week.

An average of 48.7 million shares were traded on the HNX during each session last week, worth VND444 billion.

Two women infected with COVID-19 were confirmed dead Sunday afternoon, bringing Viet Nam's tally of COVID-19 casualties to five.

Both patients suffering from underlying health conditions were diagnosed with COVID-19 on July 31.

Viet Nam has recorded 590 cases so far, 212 being active cases. Over 94,000 are in quarantine.

According to Le Anh Tung, Market & Macro Strategist at KB Securities Vietnam, investors are quite sensitive to the COVID-19 movements.

Signs of a resurgence in coronavirus cases in Viet Nam unnerved investors who were hoping for a swift economic recovery from the crisis, he said.

 

“I am afraid that the main trend of the market in August is going down. The rapid spread of COVID-19 coupled with the complicated nature of the infection cases in major hospitals, makes the pandemic more complex than it was the first time. Therefore, the risks of another social distancing order may happen and the stock market will witness an additional deep decline,” he said.

But the market may rebound afterwards as investors still pinned hopes on drastic action of the Government in the fight against COVID-19, having their faith in the stock market again, Tung said.

“I think that the market may move sideways next week and the VN-Index is forecast to fluctuate in the price range of 745-800 points,” said Nguyen The Minh, director of Analysis Division at Yuanta Vietnam Securities Co.

“As the short-term trend of the market is still down, the appropriate strategy for investors at present is to sell off and reduce their stock proportion. However, the cash flow still shows signs of different orientation and investors still have opportunities to seek profits in each specific industry group,” he said.

According to Tran Xuan Bach, a stock analyst at Bao Viet Securities Co, the VN-Index is forecast to continually oscillate between resistance 810-820 points and support 780 points next week.

“Q2 business result reporting season is gradually losing its impact on the market movement. The market will lack supporting information during the early weeks of August, therefore, the VN-Index’s movement will be driven mainly by news related to the COVID-19 pandemic,” Bach said.

“Stock exposure should be maintained at below 25 per cent of the portfolio. Investors should only open buying positions at low proportion at support zone of 775-785 points, prioritising portfolio-existing positions,” Bach said.

With the market going down last week, almost all major sectors declined.

Consumer services stocks such as Vietnam Airlines Group (HVN) slumped 10.9 per cent, Vietjet (VJC) lost 9 per cent and SCSC Cargo Service Corporation (SCS) was down 4.8 per cent.

Oil and gas stocks also decreased, PetroViet Nam Coating JSC (PVB) decreasing 9.1 per cent, PetroVietnam Technical Services Corporation (PVS) falling 9.3 per cent, Binh Son Refining and Petrochemical Company Limited (BSR) losing 7.8 per cent and PetroVietnam Oil Corporation (OIL) moving down 5.5 per cent.

Banking stocks also saw a steep fall with Techcombank (TCB) down 6.9 per cent, Vietcombank (VCB) losing 5.7 per cent, HDBank (HDB) falling 5.3 per cent, Military Bank (MBB) and VPBank (VPB) both down 4.7 per cent. — VNS

 
 

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