Covid-19 sends VN-Index plunging to biggest losing session in 19 years

On October 10, 2001 the index lost 6.3 percent. However, HoSE had only five stocks, and the VN-Index was just hovering at just over 200 points at the time.

On Monday, an overwhelming 368 stocks and just 34 gained on the Ho Chi Minh Stock Exchange (HoSE), on which the VN-Index is based. Of these, 173 tickers hit their floor prices, the lowest they could go in a trading session.

Order-matched transactions surged to VND4.29 trillion ($185.54 million), the highest liquidity seen in the past month. The average trading in February was VND2.77 trillion ($119.8 million) per session.

The VN30-Index for the stock market’s 30 biggest caps also plunged 6.35 percent. All tickers lost this session, with 22 hitting their floor prices.

Stocks of Vietnam’s three biggest state-owned lenders by assets, BID of BIDV, VCB of Vietcombank and CTG of VietinBank all lost 6.9 percent to 7 percent.

The same went for all stocks in the oil and gas sector, which includes PLX of petroleum distributor Petrolimex, Gas of energy giant PetroVietnam Gas, and POW of electricity generator PetroVietnam Power.

HoSE’s two biggest market cap stocks, VIC of private conglomerate Vingroup and VHM of its real estate subsidiary Vinhomes, and other blue chips such as MWG of electronics retailer Mobile World and BVH of insurance giant Bao Viet also crashed to floor price.

Those that didn’t hit their floor prices included SAB of Vietnam’s biggest brewer Sabeco, down 4.5 percent, MSN of food conglomerate Masan Group, 4.4 percent, and SBT of agricultural firm TTC-Sugar, 3.7 percent.

The best performing stocks on the market were NVL of real estate developer Novaland, down 1.9 percent, and EIB of private mid-sized lender Eximbank, which shed just 1.2 percent.

Monday session was the biggest single-day drop since May 8, 2004, when East Sea tensions between Vietnam and China knocked 5.87 percent off the VN-Index. The East Sea is internationally known as the South China Sea.

"Unlike recent losing sessions when the VN-Index followed world market movements, investor sentiment this session was strongly affected by how the Covid-19 epidemic is developing domestically. The whole market is in the red, and not just any single stock group," said Nguyen The Minh, Head of Analysis at Yuanta Securities Vietnam.

"The Covid-19 epidemic has changed the nature of risk on Vietnam’s stock market, and now it is impossible to predict how the disease situation will play out. Investors need to control portfolio risks and assess market trends instead of short-term movements on the VN-Index," he added.

However, the VN-Index still has two things going for it. Cash flow is returning to the market, and foreign investors have been easing their net sell in the past few sessions, Minh said.

Meanwhile, the HNX-Index for stocks on Hanoi Stock Exchange, Vietnam’s second main bourse for small and midcap stocks, plunged 6.44 percent, and the UPCoM-Index for unlisted public companies shed 5.36 percent.

Foreign investors were net sellers again to the tune of VND150 billion ($6.49 million) on all three bourses, but this has moderated considerably from the VND250-450 billion ($10.81-19.46 million) range for most sessions in the past two weeks, according to data on Vietnam’s stock exchange portals.

Investors had rushed to offload shares after Vietnam confirmed 14 new Covid-19 patients since last Friday, which followed 26-year old Nguyen Hong Nhung returning from London to Hanoi (17th patient) and a 27-year-old man returning to Vietnam from South Korea's Daegu City (18th).

Nhung’s personal chauffeur and an aunt were the 19th and 20th, and one Vietnamese national and nine foreigners on the same London-Hanoi flight as Nhung later tested Covid-19 positive.

Meanwhile the global Covid-19 death toll has reached 3,830 in 102 countries and territories, mostly in mainland China (3,120), followed by Italy (366), Iran (194) and South Korea (53).