VN-Index plunges to one-year low as coronavirus fears mount

This is the third consecutive session that Vietnam’s benchmark index has fallen since it reopened Thursday after a one-week Lunar New Year (Tet) break. It has lost a total of 6.39 percent since reopening.

However, the markets losses slowed down Monday compared to respective drops of 3.22 percent and 2.39 percent on Thursday and Friday.

Order-matched transactions continued to rise for the third session to VND4.35 trillion ($187.92 million), the liveliest session the Ho Chi Minh Stock Exchange (HoSE), on which the VN-Index is based, has seen in the past three months. 297 stocks fell while 58 rose.

According to analysts, the VN-Index’s movement has mirrored negative sentiment in key Asian markets, which are seeing major selloffs as a result of the coronavirus epidemic.

The VN30-Index for Vietnam’s 30 biggest market caps fell 0.7 percent, with 20 losing and seven gaining. Nearly half of the blue chips lost over 3 percent.

ROS stocks of real estate developer FLC Faros returned to being the biggest losing stock on the exchange, falling 6.7 percent, its floor price, as it has done so for most sessions in the past month.

It was followed by CTD of construction giant Coteccons, down 6.3 percent, and BVH of insurance giant Bao Viet, down 5.4 percent.

POW of PetroVietnam Power and GAS of PetroVietnam Gas, two blue chips related to state-owned oil and gas group PetroVietnam, were also major losers, dropping 4.9 percent and 3.8 percent respectively. PLX of state-owned petroleum distributor Petrolimex also shed 3.8 percent.

In the opposite direction, BID of BIDV and CTG of VietinBank, two of Vietnam’s three biggest state-owned lenders by assets, led gains with 3.9 percent and 3.1 percent respectively. Two private mid-sized banks, VPB of VPBank and STB of Sacombank were also among the few gainers.

Outside the VN30, medical sector stocks have been one of the strongest gainers on the market. DHG shares of Hau Giang Pharmaceutical and IMP of Imexpharm Pharmaceutical, two of Vietnam’s leading pharma firms, rose 3.1 percent and 2.2 percent respectively. Both have registered gains in the past two sessions.

On the UPCoM (Unlisted Public Companies Market), an exchange with lower disclosure requirements to accommodate trading of unlisted companies’ stocks, DNM of Danameco Medical JSC, DHT of Ha Tay Pharmaceutical, and CDP of Codupha Central Pharmaceutical all hit their ceiling prices on Monday.

In particular, DVN of Vietnam Pharmaceutical rose 13.4 percent, and gained a total of 41 percent over the last three sessions.

Hoang Huy, head of Equity Research at securities firm KIS Vietnam, said that investors have been pouring money into pharmaceutical stocks in the belief that this industry will benefit from the spreading Wuhan pneumonia virus epidemic.

However, this impact is mainly psychological, because benefits for each business will be different and difficult to quantify in the short term, Huy said.

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