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Stock market plummets, $10 billion lost

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The Vietnamese stock market saw an unprecedented plunge on January 19. But panic did not occur.

Stock market plummets, $10 billion lost

The Vietnamese stock market saw an unprecedented plunge on January 19

Nearly all shares at the HCM City Stock Exchange (HOSE), Hanoi Stock Exchange (HNX) and UpCom saw the prices falling by 5-7 percent by January 19 morning closing session.

The VN Index lost 75 points, or 6.3 percent, while HNX Index also decreased.

The decreases were milder at the afternoon session, but still unprecedented in history. The VN Index at the end of the day dropped by 60.94 points to 1,134 points, HNX Index by 6.48 points to 224.02 points, and UpCom Index by 2.4 points to 76.15 points.

As such, the capitalization value in the entire market decreased by $9-10 billion.

Huynh Minh Tuan from Mirae Asset commented that the decline was unavoidable after a long period of a sharp increase from a low of 645 points in March 2020 to nearly 1,200 points in recent sessions.

According to Tuan, many securities companies predicted a 3-4 percent decrease for some trading sessions. But the 6 percent decrease on January 19 morning was beyond prediction.

The market plummeted, according to Tuan, because of convergence. There are many new investors and they follow the crowd when making investments. This is why the situation went from good to bad.

A report shows that the number of new investors of the last year was equal to the number of investors in the last 10 years combined. In 2010, securities companies had 1.5 million accounts and in early 2020 had 2.2 million, which meant the number of accounts increased by 700,000 within 10 years.

Meanwhile, just within 2020, the number of accounts rose by 600,000.

Le Quang Tri from Tri Viet Securities commented that despite the sharp decline investors are not in a panic.

The common characteristic of the latest plunge and the ones in the past is that investors rushed to sell shares.

However, as investors had made big profits before, 35-40 percent, it was not a problem to sell at the floor price and accept a price fall of 5-7 percent.

In fact, this was a mass profit-taking phenomenon, not stop-loss as seen in the previous sale-off campaigns.

Positive prospects

The stable macroeconomy is the fundamental factor for the recovery and strong rise of the stock market. There are many ‘bright spots’ in the economy, including high export growth rate, record high trade surplus and curbed inflation.

Tuan attributed the sale-off to convergence in psychology in front of the important 1,200 point resistance threshold and the accumulated margin. The 1,200 point threshold has become a firm resistance threshold three times.

According to a group of securities investment experts in HCM City, the sale-off session is the result of the convergence of psychological effects, which shifts from profit taking to exiting the market at all costs.

This should be seen as a session where investors wanted to relieve the accumulated market pressure.

Tri believes that the market decreased because of the profit-taking pressure. The market may see continuous decreases in the next few trading sessions.

However, market prospects are still positive and the share prices may see a new increase wave after April 30, after listed companies organize their shareholders’ meetings and release yearly business plans.

Prior to that, many securities companies predicted that the market would decrease in Q1 before increasing again in Q2, when businesses set new plans for the new year.

The Vietnamese stock market is predicted to continue rising in 2021 on positive economic prospects and predicted GDP growth rate of 6-6.8 percent.

Vietnam’s stocks can enjoy benefits from the cheap-money cycle when the deposit interest rates decrease. As the deposit interest rates are low, money flows into the stock market.

The good performance of many large corporations amid the pandemic also serves as a ‘pedestal’ for stock prices.

The stable macroeconomy is the fundamental factor for the recovery and strong rise of the stock market. There are many ‘bright spots’ in the economy, including high export growth rate, record high trade surplus and curbed inflation.

The government of Vietnam is applying measures for an economic recovery, such as promoting public investment, improving capital efficiency, and expanding global integration with many FTAs signed, including EVFTA and RCEP.

Some analysts believe the VN Index will climb to a new record high in 2021. This is not a far-away goal, if noting that some stock markets in the world, including the US, have reached peaks, while Vietnam still has not exceeded the old peak though it bears less impact from the pandemic. 

V. Ha

Source: https://vietnamnet.vn/en/feature/stock-market-plummets-10-billion-lost-707033.html

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Mitsubishi pulls out of central Vietnam coal plant

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Mitsubishi pulls out of central Vietnam coal plant

The logo of Mitsubishi Corporation is displayed at the entrance of the company headquarters building in Tokyo, Japan, April 26, 2016. Photo by Reuters/Issei Kato.


Japan’s Mitsubishi Corp has decided to pull out of a coal-fired power plant in central Vietnam amid growing international concern about environmental impacts.

The Japanese trading house will pull out of the 2-gigawatt Vinh Tan 3 project, planned to be located in the southern province of Binh Thuan, because of climate change targets, Reuters reported, citing two anonymous sources.

Without mentioning Vinh Tan 3 specifically, Mitsubishi said in a statement that it was committed to reducing its investment in coal power in line with international climate goals.

The 2-gigawatt plant was originally scheduled to come online in 2024.

OneEnergy, a joint venture of Mitsubishi and Hong Kong’s CLP group, holds a 49 percent interest in the $2 billion project. State-owned utility Vietnam Electricity owns another 29 percent. Chinese companies are handling materials procurement, construction and equipment delivery.

This marks Mitsubishi’s first withdrawal from a coal plant project. The trading house has said it will not build any new facilities of this type after Vung Ang 2, a Nikkei report said.

Mitsubishi still has a stake in the Vung Ang 2 coal power plant being built in the central province of Ha Tinh, which is more widely known after being subject to critical scrutiny by environmental and other groups as well as investors.

Source: https://e.vnexpress.net/news/business/companies/mitsubishi-pulls-out-of-central-vietnam-coal-plant-4240625.html

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Unable to cover expenses during Covid-19, owners sell hotels at cheap prices

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Many offers to sell coastal hotels in Da Nang have appeared on real estate forums these days. Most of them are located in districts Son Tra and Ngu Hanh Son.

Unable to cover expenses during Covid-19, owners sell hotels at cheap prices

A hotel put up on sale

On just one real estate website on February 22 many ads were listed.

A 4-star hotel on Vo Nguyen Giap street, 600 square meters, with 19 stories, 125 rooms and 2 conference rooms is offered at VND440 billion.

Hotels on the major streets of Ha Bong, Tran Bach Dang, Ho Nghinh, Vo Nguyen Giap and Ho Xuan Huong are offered at tens or hundreds of billions of dong.

Hoang Lam, the owner of a hotel on Tran Bach Dang street, said accommodation service providers have been hit hard by Covid-19.

“We have been struggling to survive by cutting costs. However, as capital is getting exhausted, hotel owners have to liquidate assets to pay bank debts,” he said.

“Selling hotels is unavoidable as there is no source of revenue, and the operation cost is high,” he said.

Do Van Hien from Dana Hotel, a broker, said a lot of hotels in Da Nang have been put up for sale since the second Covid-19 outbreak.

“The hotels for sale are 2-4-star. The prices have fallen by 20 percent and buyers are mostly from northern provinces,” Hien said.

According to Hien, 3-star hotels are priced at VND20-100 billion, while 4-star hotels are at least VND280 billion. The value of hotels depends on the locations, area, quality, numbers of rooms and brands.

The transactions of 4-5-star hotels, which have strong brands, are confidential. Hotel owners only work with prestigious brokers, and buyers have to prove their financial capability.

Hien said no one wanted to sell hotels in 2016-2019 because they could make a high profit from the business. But since 2020, guests are coming in dribs and drabs, and operation costs and loan interest rates are high.

Cao Tri Dung, chair of the Da Nang Tourism Association, admitted that tourism services have become nearly frozen and many hotels have been put up on sale.

“The pandemic resurgence before Tet blocked sources of guests. Ninety percent of clients cancelled or postponed plans to come to Da Nang,” he said.

He said this is common in a market economy, and that it is time to restructure the accommodation segment.

According to Da Nang People’s Committee, the total number of guests staying at accommodation facilities in the city in January 2021 was 251,094, a 65.6 percent decrease compared with the same period last year. 

Ho Giap

Source: https://vietnamnet.vn/en/business/unable-to-cover-expenses-during-covid-19-owners-sell-hotels-at-cheap-prices-715493.html

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Over 33,600 firms dissolve, suspend operations in Jan-Feb

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An employee is at work at a textile factory. The country saw over 33,600 firms leave the market or suspend their operations in the first two months of the year – PHOTO: VNA

HCMC – The country saw over 33,600 firms leave the market or suspend their operations in the first two months of the year, up 18.6% year-on-year, according to the Ministry of Planning and Investment.

Of the total, over 21,630 companies signed up to temporarily suspend operations, some 8,380 halted operations to complete dissolution procedures and over 3,590 were dissolved.

The number of newly-established firms in February dropped by 12.3% year-on-year at 8,040, while pledged capital surged by 85.6% at VND179.7 trillion. Besides, some 7,700 firms left the market in February, VietnamPlus news site reported.

Between January and February, some 18,130 companies were established, inching down 4% year-on-year, while the number of firms returning to the market, mainly active in the art, entertainment and education fields, and lodging and catering services, during the two-month period was 11,030, down 7.6% against the same period last year. However, the total registered capital increased by 12% to VND720.4 trillion.

Source: https://english.thesaigontimes.vn/80702/over-33600-firms-dissolve-suspend-operations-in-jan-feb.html

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