Low economic outlook drags on local shares

July 23, 2020 | 10:05
Vietnamese shares ended Wednesday on a negative note as market sentiment was clouded by pessimism about the growth of both global and local economies amidst the surge in total coronavirus infection cases.
low economic outlook drags on local shares
A BIDV office in My Tho City, Tien Giang Province. Lender BIDV shares (HoSE: BID) dropped 2.0 per cent on Wednesday. - VNA/VNS Photo Hoang Hung

Viet Nam’s benchmark VN-Index on the Ho Chi Minh Stock Exchange dropped 0.77 per cent to close at 855.08 points, retreating from a slight gain of 0.03 per cent on Tuesday.

Large-cap stocks tracker VN30-Index lost 0.85 per cent to 797.85 points while the VN30 futures, which mature in one month, dipped 1.61 per cent to 792 points.

Other VN30 futures expiring in September and December this year and March 2021 were down between 0.82 per cent and 1.25 per cent.

In the blue-chip index, 25 of the 30 largest stocks by market capitalisation and trading liquidity declined, including construction firm Coteccons (CTD), Vietinbank (CTG), Bank for Investment and Development of Vietnam (BID), Sacombank (STB), residential property firm Vinhomes (VHM), dairy producer Vinamilk (VNM) and insurer Bao Viet Holdings (BVH).

Real estate companies Vincom Retail (VRE), Novaland (NVL) and Eximbank (EIB) were the only three winners, which climbed between 0.3 per cent and 2.5 per cent. Vietcombank (VCB) and steel producer Hoa Phat (HPG) finished flat.

The mid-cap and small-cap indices on HoSE declined by 0.56 per cent and 0.57 per cent, respectively.

After picking up on Tuesday thanks to economic stimulus packages by the European Union and Australia, market sentiment returned the caution territory on worries about the economy growth, which has been ravaged by the COVID-19 pandemic since the end of January.

Specialists at a meeting on Tuesday estimated Viet Nam’s economic growth in 2020 will be between 2.2 per cent and 3.8 per cent, lower than the Government’s expectation of 4 per cent.

The forecast was delivered based on the development of the COVID-19 pandemic. The total number of global infection cases on Wednesday passed 15.1 million with surging numbers in Viet Nam’s key export markets such as South Korea, Australia, the US, India and Russia, as well as regional countries.

Meanwhile, the local second-quarter earnings season is near the end and local stocks have already priced in.

According to Le Duc Khanh, market strategy director at PetroVietnam Securities Incorporate (PSI), the downtrend will not end soon because bad news is dominant on the market, putting pressure on investors and making them stall from buying in local stocks.

The minor HNX-Index on the Ha Noi Stock Exchange slipped 0.67 per cent to finish Wednesday at 115.32 points, stepping down from a 0.32 per cent increase on Tuesday.

More than 318 million shares were traded on the two exchanges, worth VND4.74 trillion (US$204.4 million).

Foreign investors net-sold nearly VND164.7 billion worth of local shares. Net foreign selling was down 48.4 per cent from Tuesday’s figure.

VNA

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