Will the VN Index recover after Covid-19?
Experts all think the appearance of a new cash flow for bottom fishing will help the stock market recover after a strong correction during Covid-19.
The VN Index increased in 16 trading sessions and only decreased in three sessions in the last month. The index of the HOSE (HCMC Stock Exchange) bourse ‘accumulated’ 107 points, which means an increase of 16.3 percent
Bui Nguyen Khoa from BIDV Securities: The VN Index will hover around 800 points.
According to BSC, from March 24 to April 17, the VN Index regained 19.8 percent after the decrease until March 24.
|The impact of Covid-19 on businesses’ operation can be seen clearly in finance reports. Investors have become more practical.|
The impact of Covid-19 on businesses’ operation can be seen clearly in finance reports. Investors have become more practical.
The driving force of the recovery is the belief that the US economy will see a V-shape recovery after the second quarter of negative growth. However, what is happening in China has caused concerns. Though China contained the epidemic in March, it still cannot gain a strong recovery because the US and Europe have not reached the peak of epidemic.
I think that under the most optimistic scenario, the VN Index would hover around 800 points for 1.5 or 2 months.
Nguyen Duc Hung Linh from SSI: There are still many unknowns with cash flow.
I think the V-shape model is mostly likely to happen with Vietnam’s economy for three reasons.
First, it is highly possible that the epidemic will end in summer.
Second, the government shows its strong determination to boost growth with reasonable solutions.
Third, the strong stimulation capacity of the US, West European and Chinese economies will help the world’s economy recover quickly after the epidemic.
The probability rates for other models are smaller, 25, 25 and 15 percent for U-, L- and W-shape models.
However, even if the economy sees a V-shape recovery, this doesn’t mean the stock market would also see a V-shape recovery.
There are many factors for cash flow and the possible scenario for Vietnam’s stock market is a light recovery from the bottom and accumulation for 2-3 quarters. The ‘wave’ may arise in early 2021 if Donald Trump wins the election and the epidemic doesn’t return.
Phan Dung Khanh from Maybank KimEng: It’s difficult for VN Index to regain the old 2018 peak.
Only Vietnamese individual investors are buying stocks. Vietnamese institutional investors, foreign institutional and individual investors are selling stocks. This means that only one out of four subjects in the market are buying. However, the investors aim to make money in the short term.
I think May will be a ‘dangerous’ month. The stock index has increased for one month and the market needs at least one spell of decrease to become sustainable.
The number of newly opened accounts has reached a record high at a time when the stock market has fallen sharply.
The Vietnamese stock market regained nearly 100 points after a gloomy March, producing one of the best performances among stock markets around the globe.