Stock indexes increase, glimmer of hope for recovery
Signs of recovery appeared last week as the stock price stopped sliding.
On March 30, the VN Index dropped by 661 points, or 28 percent, from 960.99 points of the last trading session of 2019. The market capitalization value lost VND886.420 trillion, or $37.4 billion.
On March 23, 363 share items saw prices decreasing, of which 193 shares fell to floor prices. Investors fled, and shares were left unsold.
On the next day, March 24, the VN Index dropped to 659.21 points, a 3-year low, which meant the loss of VND860 trillion in capitalization value on the HCM City bourse.
Covid-19, the negative impacts of the oil price war between OPEC countries and Russia, and the selling of assets to get dollars have caused the global stock market to fall sharply. The sharp fall has raised big concerns about emerging markets like Vietnam, thus causing Vietnam’s indexes to fall.
|According to KBSV, the impact of Covid-19 will be huge, especially as the global economy shows signs of weakening. Central banks have no more ‘room’ to loosen policies. The world economy had experienced a growth period over the last 10 years.|
According to KBSV, the impact of Covid-19 will be huge, especially as the global economy shows signs of weakening. Central banks have no more ‘room’ to loosen policies. The world economy had experienced a growth period over the last 10 years.
“The rapid development of Covid-19 has put nearly all economic forecasts into ‘offside’ position. Therefore, the temporary absence from emerging markets is the optimal choice for the short term,” KBSV commented.
Hope comes back
After a week of staying ‘blazing red’ because of the negative impact of the world market, the Vietnamese market has shown signs of recovery.
Blue chips, including Vingroup’s shares, saw the price rising again, thus helping the VN Index have the sharpest gain in 11years of 4 percent on March 25.
The significant rise was explained by the rise of the European and Asian stock markets, which helped restore confidence in Vietnam’s stocks.
There is another factor that helped stock prices – the move by listed companies to buy treasury stocks.
Local newspapers reported that the companies spent trillions of dong to buy treasury shares, a remedy which can rescue stock prices and protect enterprises from the risks of hostile takeovers.
The aid packages announced by the government and the State Bank have also helped calm investors down. SBT shares saw prices increasing to the ceiling levels in two trading sessions last week after Dang Van Thanh registered to buy 10 million shares of Thanh Thanh Cong Bien Hoa.
Foreign investors’ 33 consecutive sessions of net sales has stopped, and the reported net sale of VND30 billion last week brought new hope to investors.
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