Investors advised to stay out of market until storm abates

Vietnam in the last three years has had to bear negative impacts from conflicts around the world.



In early May 2014, for example, China deployed a HD981 oil rig on the East Sea belonging to the Vietnamese territory. Immediately, the VN Index plunged, with many trading sessions having no registered buyers.

Within several days, the VN Index dropped from 580 to 510 points. Many investors suffered as they could not sell stocks to avoid losses.

Also in 2014, the finance market faltered when the US and several Middle Eastern countries launched air strikes on the Islamic State (IS) in the north of Syria. Though the event did not have direct relation like the HD981 deployment on the East Sea, it, to some extent, had a negative impact on Vietnam’s market.

Also in 2014, the finance market faltered when the US and several Middle Eastern countries launched air strikes on the Islamic State (IS) in the north of Syria. Though the event did not have direct relation like the HD981 deployment on the East Sea, it, to some extent, had a negative impact on Vietnam’s market.

The air strike began on September 22, 2014, when the VN Index was in the 610-point zone. Just three months later, the index dropped to the 510-point zone.

On April 7, 2017, however, the US shot Tomahawk missiles into Syria, but the Vietnam stock market continued to increase.

However, later, the concerns about tensions between the US and North Korea panicked investors. The electronic boards at securities trading floors were lit red on April 14.

The VN Index dropped by nearly 7.08 points to 717.27 points, while the HNX Index decreased by 0.73 points to 89.3 points.

Earlier, on the night of April 13, the US dropped non-nuclear ‘mother of all bombs’ in Afghanistan. At the same time, NBC quoted its sources as reporting that if the US had enough evidence that North Korea would try nuclear tests, it would strike Pyongyang.

Analysts noted that Vietnam has been influenced, more or less, from political conflicts. Meanwhile, the stock index has been growing since 2016 and there has been no significant correction.

This gives one more reason to them to advise investors to temporarily stay out of the ‘game’ and wait until the ‘storm abates’.

Nguyen Hong Diep, director of the HCMC branch of SHS Securities, commented that the conflicts like these happened many times in the past and in all the cases, the events affected the stock market.

However, Diep commented that after the events, the stock markets recovered strongly and the wars seemed to be just an ‘excuse’ for collecting stocks.

Sharing the same view, Nguyen Mai Phuong from VN Direct Securities said the market decline is a good opportunity for investors to pick up the goods.

However, she said: “Don’t hurry to buy. It would be better to wait until the opportunities become clearer”.

Thanh Lich / vietnamnet