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The most importance in this period is to stabilise investors' psychology. Photo: internet

Vietnam’s securities market suffered from the global market

According to the SSC, the Covid-19 epidemic has broken out in many countries around the world, causing negative effects on the global economy in general and the securities market in particular. Not only securities markets in China and Asia have plummeted, but many other markets in the world have dropped sharply when Covid-19 has spread to 68 countries, territories and new epidemic areas have emerged.

The SSC’s statistics show that the effects of Covid-19 epidemic on Vietnam’s Securities market can be divided into two stages: the first period after the Lunar New Year when the epidemic spread in China and the second recent period when the epidemic has spread to many countries around the world.

Specifically, in thefirst period, the securities market plummeted (January 30, down 3.22%; January 31, down 2.39%; and on February 3, 2020, down 0.91%). But after that, Vietnam’s securities market had some positive recovery sessions (February 6, 2020, up 1.36% and February 20, 2020, up 1.01%).

In the second period, before the epidemic worsened, Vietnam’s securities market continued its downtrend. This was also the period when foreign investors had a lot of net selling sessions and showed signs of net withdrawal of foreign capital. However, this move was a common phenomenon inmany markets around the world.

In the face of the negative effects of the Covid-19 epidemic on the securities market, the SSC’s leaders said that the Covid-19 epidemic had a negative impact on the securities market so epidemic prevention and control was a priority. At the same time, the Covid-19 epidemic was directly affecting the production and business activities of enterprises, so it was necessary to take measures to support and stimulate the economy to reduce losses through monetary and fiscal policies. Also, there was a need to increase information about epidemic prevention measures and results and supportive policies to create confidence for investors.

According to Mr. Pham Hong Son, Vice Chairman of the SSC, in the current context, the SSC will continue to manage the marker with the view: “Respect the self-management under the market's supply-demand relationship, minimize administrative and technical impacts and interventions on the market when it is not really necessary.”

Along with that, the SSC and other agencies will strengthen monitoring and supervision of the market developments to provide official and transparent information to the market in a timely fashion; reassure investors’ psychology; and strictly handle acts of manipulating and profiting through epidemics or spreading false rumors to seek personal benefits.

Solutions proposed for the "season" of shareholders' meetings

In the future, the "season" of shareholders' meetings in companies will officially begin. The SSC's leaders asked the Stock Exchanges, the Vietnam Securities Depository Center and the securities companies to pay more attention to the application of information technology, to enhance support for investors and companies transactions and organizing online shareholders’ meetings.

In order to support the public companies to organizemeetings safely, the SSC has encouraged the Securities Depository Center to publicize information on the solution of online meeting and e-voting. This is the way that many developed securities depository centers have applied, but in Vietnam, public companies, including listed companies, are still not used to doing it this way.

As for e-voting, a representative of the Securities Depository Center said that this service has been prepared by the Securities Depository Center for many years, and is basically effective, especially in the current context of the epidemic.

Mr. Son said that Vietnam’s securities market will still be negatively affected by the Covid-19 epidemic, which is unavoidable, at least in the short term. However, he affirmed that Vietnam has responded well to the epidemic and is motivated by a good macro-economic background, the securities market will be stable soon, the deep decline of the market is mainly due to the psychology of fear.

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"I recommend that the heads of intermediary financial institutions should firmly believe in the internal strength of the economy, in the solutions that the Government, ministries and agencies are taking, and in the market's strength to help reassure the anxiety of investors. In the worst-case scenario, if the Covid-19 epidemic is only controlled in the second quarter of 2020, according to the Ministry of Planning and Investment's forecast, Vietnam's GDP in 2020 will still increase at 6.09%.” said Pham Hong Son.