Investors overreacted to coronavirus outbreak, says securities watchdog chief

The benchmark VN-Index fell to a one-year low of 928.14 points on Monday after losing for a third consecutive session since reopening last Thursday after a week-long Lunar New Year (Tet) break.

It has lost 6.39 percent since reopening, affected by the ongoing novel coronavirus (nCoV) outbreak, which has infected nine people in Vietnam.

But the chairman of the State Securities Commission (SSC), Tran Van Dung, put it down to overreaction by investors and assured there would be no suspension of trading.

"I’m sure [the government] will not suspend trade because the situation is not that bad," he further told VnExpress. "The SSC has prepared for various scenarios and investors should not be worried by recent market developments."

In the past, when there were epidemics like SARS and H5N1, the market fell too but recovered as soon as countries started announcing that they had contained the outbreak, he pointed out.

Dung said he expects a similar trend this time, with the Vietnamese government showing determination to contain the outbreak.

The loss of 0.91 percent on Monday was an improvement from the falls of 3.22 percent on Thursday and 2.39 percent on Friday last week.

In its latest report, Saigon Securities has raised the short-term outlook for pharmaceutical stocks from "neutral" to "positive", but retained the sector’s 2020 outlook at neutral, saying it does not foresee the coronavirus outbreak having any substantial impact on the sector in the medium-term.