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Widespread disease slams the stock market
Vietnam News - 2/25/2020 2:14:57 PM
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The spread of COVID-19 outside China severely affected Asian financial markets on Monday and Việt Nam’s market was no exception.
The benchmark VN-Index on the Hồ Chí Minh Stock Exchange lost 3.19 per cent to close at 903.34 points.
The VN-Index had fallen 0.46 per cent last week.
Nearly 292 million shares were traded on the southern bourse, worth nearly VND5.1 trillion (US$219.7 million).
The market breadth was negative with 330 declining stocks and 42 gaining.
VN-Index’s biggest losers were the Bank for Investment and Development (BID), Vingroup (VIC) and Vinhomes (VHM).
The large-cap tracker VN30-Index decreased by 3.62 per cent to close at 837.40 points.
All of the 30 largest stocks by market value and trading liquidity in the VN30 basket declined.
The outbreak of novel coronavirus disease 2019 (COVID-19) has clouded the outlook for world growth with infections and deaths rising in South Korea and Italy.
The large spike in Italy triggered fears among investors about the potential for the virus to spread deeper into Europe and cause economic disruption.
As of Monday morning, South Korea Center for Disease Control and Prevention reported that seven people died of coronavirus with 763 infectious cases. Accordingly, Korea passed Japan to become the second-highest number of Covid-19 cases in the world after China.
The emergence of new COVID-19 cases in Korea and other countries brought about investor anxiety about the global economy in 2020.
Therefore, at market close Monday, Korea’s KOSPI, Hong Kong’s Hang Seng, and Japan’s Nikkei 225 respectively dropped 3.87 per cent, 1.79 per cent, and 0.39 per cent, respectively.
Asia Pacific’s stock market negatively influenced Việt Nam’s stock market, leading to VN-Index’s decline.
According to Bảo Việt Securities Co (BVSC), the outbreak of COVID-19 in South Korea will have a negative impact on the Vietnamese economy.
“The disease outbreak in Korea can cause a sharp decrease in the number of tourists from this country to Việt Nam. According to 2019 statistics, tourists from China and South Korea accounted for 56 per cent of total visitors to Việt Nam.
“With a sharp decline in the number of tourists from China due to the epidemic, another sharp drop in the number of visitors from South Korea will be a double hit on Việt Nam's tourism, as tourists from South Korea accounted for 29.9 per cent of the total number of visitors to Việt Nam in 2019,” the company said.
“Việt Nam's exports and imports, which have been negatively impacted when the disease outbreak in China, may also be more severely affected as Việt Nam's exports to South Korea and China accounted for 23.2 per cent of total export value, while Việt Nam's imports from the two countries contributed 48.4 per cent to our total import value.”
“Notably, the outbreak in South Korea could disrupt the supply chain of raw materials for Việt Nam's manufacturing and processing industry, because Samsung's electronics products, up to 30 per cent of Việt Nam's export value, may be short of input materials. This will have a negative effect on Việt Nam’s exports to other countries,” BVSC said.
On the Hà Nội Stock Exchange, the HNX-Index dropped 3.62 per cent to end at 104.18  points.
The northern market index had fallen 1.50 per cent last week.
More than 4.7 million shares were traded on the northern bourse, worth VNĐ765.5 billion. — VNS
Read original article here
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