Chairman of SSC:  We need belief in sustainability of Vietnam's stock market

Chairman of SSC Tran Van Dung.

At the first session of the week on March 9, a series of stocks hit the floor, which showed the sell-off situation of investors. How do you evaluate this situation?

Ending the session on March 9, the VN-Index decreased by 55.95 points (-6.28 percent) to 835.49 points. This is the strongest decline session of Vietnam since the East Sea event in 2014 with a VN-Index decrease of 5.87 percent.

However, the liquidity of the market has increased sharply, reaching VND 6,500 billion on both listed stock exchanges.This showed that there is still money flow to buy stocks hitting floor with good value. In addition,foreign investors continued their net selling trend, but the net selling value in the session was about VND 230 billion.

In general, the sharp decline of the first session of the week was in line with the development of of world stock markets. We believe that the sharp decline in the session on March 9 is unavoidable because this session coincides with “the bad news at the same time.”

The world oil price plummeted, the Japanese Government has released economic statistics in 2019 with the results worse than expected that have raised fears that the global economy will fall into recession, especially the impact of the Covid-19 epidemic, whilethe FED made an urgent decision to reduce interest rates by 0.5 percent.

Besides the pessimistic information, the complex development of the Covid-19 epidemic affectedthe psychology of global investors.

The stock market is considered abarometer of the economy, so when there is a lot of information affectingthe global economy or abnormal incidents, it will reactimmediately.

As for Vietnam, with the high economic openness, the above information could not negatively affect the stock market. In Vietnam’s stock market, the decline in the first session of the week may be predicted by many experts and investors. The main and the most immediate cause is the complex development of the epidemic when the number of Covid-19-positive patients in Ha Noi has increased rapidly and more new infectedcases in other provinces at the weekend. This is an abnormally negative factor,affecting the psychology of investors in the market, leading to a sell-off and a sharp decline.

According to many forecasts, the development of Covid-19 epidemic will be more complex. How do you assess its impact on Vietnam's stock market?

Currently, the Covid-19 epidemic will continue to be complex, unpredictable and have a negative impact on the world economy and the international stock market.

The increase in new infected cases of Covid-19 has affected the economy and stock market, with the great determination of the Government, the people, plus the capabilities and experience of Vietnam, this epidemic will be controlled soon.

In general, when Vietnam controls the epidemic, with the internal capacity of the Vietnamese economy, we still have many bases to believe in the possibility of positive economic growth. Based on the global correlation analysis, when upheavalsoccur, the cash flow of investment may temporarily decrease, but when everything is stable, the smart cash flow will flow to safe and profitable sectors. Vietnam has a good macro foundation and advantages in free trade agreements as well as the trend of shifting global investment flows, the Government always creates favorable conditions for economic development and foreign investment attraction. We believe that Vietnam is still a bright spot when the disease is controlled.

In addition, the vulnerability of businesses in this pandemic is unavoidable.However, in the medium term, the Government's credit and fiscal support packages will support businesses to recover business production.

We believe that with the determination of the Government, the solidarity of the people, the Covid-19 epidemic will be controlled soon.The economy and the stock market will be stable and grow.

Therefore, in the current context, we expect that enterprises, intermediary financial institutions and investors need to believe in the internal strength of the economy and the solutions provided by the Government,ministries, sectors, as well as the strength of Vietnam's stock market to help the market regain its growth momentum, especially to avoid unnecessary sell-offs.

As a management agency, does the SSC provide any solutions to support investors?

Facing the negative effects of the Covid-19 epidemic, the SSC’s top priority is the prevention of the Covid-19 epidemic in the whole sector, especially the protection of the health of officials and employees in the system and development of safe transaction plans in the context of complex development of the Covid-19 epidemic. However, to support the economy and stock market to overcome this pandemic, there need great efforts of the entire political system, business community and people.

The SSC will continue to manage the stock market in the viewpoint: “Respect the self-adjustment according to the market's supply and demand relationship, minimize administrative and technical impacts and intervention in the market when it is not really necessary.”

The SSC and units will intensify monitoring and monitoring market movements to promptly provide official and transparent information to the market; reassure investors’ psychology; strictly handle acts of manipulating and profiting by epidemics or providing false information for benefits.

We will report to the Ministry of Finance solutions to reduce difficulties for businesses operating in the securities industry and for investors, including solutions to cut some securities service prices andloosen some regulations on margin trading applicable to the immediate period.

To continue to actively manage the stock market in the complicated period, the SSC will continue to closely monitor the developments of the domestic and foreign economy, politics and securities to promptly inform domestic and foreign investors to understand the situation and stabilize psychology for investors.

Continue to implement the planned solutions, focusing on solutions on publicity, developing plans to proactively organize transactions in the whole market even in case of Covid- 19 developments in the direction of increasing transaction levels and monitoring online transactions.

Thank you, Sir.