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Vn-Index may recover from 1,260
Ngoc Mai 17:51, 2021/07/13
The index lost a total of 123.97 points, causing evaporation of over VND464.3 trillion (US$20.16 billion) in the HoSE’s market capitalization.

Following a sharp decline of 50.84 points or 3.77% in yesterday’s trading session to 1,296.3, securities firms expect the benchmark Vn-Index to continue declining to around 1,260 before recovering.

 An investor at a securities firm in Hanoi. Photo: Pham Hung

Since the launch of the new trading system on the Ho Chi Minh City Stock Exchange (HoSE) on July 5, the Vn-Index has witnessed major declines of 3.99% on July 6, 2% on July 9, and 3.77% on July 12 at the latest.

Overall, the index lost a total of 123.97 points, or 8.73% in the past six trading sessions, causing evaporation of over VND464.3 trillion (US$20.16 billion) in HoSE’s market capitalization.

Experts shared the view that such decline came from investors’ concern over the current Covid-19 situation that could pose severe consequences on enterprises’ performance, and eventually the economy.

This came from the fact that the pandemic evolution was the main factor causing several dips of the Vn-Index in the past, with the largest plunge of 74 points or 6.67% on January 28.

SHS Securities Company said there remained some positive sides in yesterday's session, however, including a sharp rise in market liquidity at an all-time high of VND37.1 trillion ($1.61 billion) and foreign investors returning to a net purchase position of over VND1.4 trillion ($61 million).

Several correction phases brought the price-to-earnings (P/E) ratio of the Vn-Index to 16.5x, which is considered attractive given the market’s P/E at 18x in past months.

“Investors could start buying in when the Vn-Index returns to the supporting zone of 1,260,” it noted.

Viet Capital Securities also expects investors to jump back to the market when stocks are at low-zone value, especially those with the largest market cap in Vn30 Index. 

“If the Vn30 Index could return to the 1,460-mark, there is a high chance of recovery, otherwise, the market may face further correction periods,” stated the securities firm.

Vietcombank Securities noted recent sell-offs in the past sessions provides an opportunity for market stability, as such, investors could look at stocks with healthy financial conditions and low decline level compared to the average, noting they could lead the market recovery once good news arrives.

TAG: Vietnam VN-Index Covid-19 pandemic nCoV stock market
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