University of Languages and International for Study Student name: Hoàng Lê Bình ID: 16042169 Phone: 0362980707 Email: lebinh190898@gmail.com Final assignment for English for Financial and Economy Introduction When the coronavirus outbreak, also World Health Organization announced that this is a pandemic on a global scale, the stock market all over the world has suffered a heavy recession Vietnam is not an exception While many companies are unable to work because of the social limit exposure order, investors are more likely not to have trust in the stock market anymore The Vietnamese stock market has seen a significant recession since January 2020 This report is going to analyze the volatility of the domestic stock market since the outbreak of COVID 19 We are trying to figure out how, and why the stock market was impacted Review of related economic concepts The stock market refers to the collection of markets and exchanges where regular activities of buying, selling, and issuance of shares of publicly-held companies take place Stocks represent ownership in corporations and the company issues stocks through IPO to raise more funds for their operation So the stock market is easily affected when the demand of the buyers decreases, especially in the COVID 19 pandemic time There are reasons for buying stocks which are yearly income, investment, and speculation In other words, investors buy stock for the profit in the short term, or long term We must know that the liquid of the stock is quite low, which mean after buying stock, or in another word: investing, it’s not easy to sell your stock and withdraw your money back So investors need to carefully consider the risk when buying At the moment, most of the speculators are bears, they expect a fall on the price of the stocks The impact of Covid 19 on the stock exchange The following graph shows the volatility of the Vietnam Ho Chi Minh Stock Index from September 2019 to September 2020 By Mar 24, the VN index point is decreased by 30% (down to 660 points) consider the beginning of 2020 That was the moment when the outbreak was started in our country Top biggest banks in Vietnam are BID, BIDV and VCB have the stock value decreased, the top 10 most liquidity companies also have their stock value reaching the bottom peak After 99 days without new positive cases in the community, Vietnam is the 1st country officially announced that they are no longer have coronavirus The green is all over the stock market electric broad Many domestic and foreign investors share the idea that the VN index is the best place for their money However, new cases from Da Nang once again took the country back to the fight with the virus The potential of risk is higher and the drop in the stock market is predictable This time is not as bad as before since investors have more faith in the government can deal with the situation, also governments all over the world are starting to rebuild the economy since people desperately need jobs Response of investors to the downturn of the stock exchange As discussed in the previous part, the Vietnamese government is trusted to be well handled the outbreak situation According to the Securities Joint Stock Company (SSI), the taste of foreign investors to Vietnam is still very good because of many government policies to push to economy upward In the long term, which is the playground of mostly wealthy domestic and foreign investors, many long-term investors believe that buying stocks at the moment is going to create huge profits That is the reason for the recovery of the Vietnamese stock market in recent times In the short term, investors still doubt the risk because the market is getting better depends mostly on the money of the individual investors buying stocks They may buy quick, and also sell very quickly, which makes the volatility is unpredictable Since they don’t have the intention of investing in the long term, finding some other ways of investing which have higher liquidity like gold should be the better option Taking with Mr Chu Manh Tuyen, CEO of Uproad Group, he said: “Our contract was about to be signed, and then the outbreak of Da Nang came, wiped out my stock contract of selling 50.000 USD company’s stock value They are scared because they don’t know if my company’s stock value is going to increase or not anymore.” In any circumstances, there are both winners and losers According to Statista, there are big brand categories are believed to be the hardest hit due to coronavirus Being asked, 68.8% of people believe that Travel & tourism is the biggest victim of the coronavirus pandemic Following Retail, Restaurants and Automotive are 56.1%, 49.3%, and 48.8% respectively Top is Apparel and fashion with 26.3% Customer expectation is an important factor that influences the decisions of investors since these categories’ stock value is decreased significantly Since the entire world has the restriction order, travel and tourism are believed to be the hardest hit since no one really traveling anymore Every single country also has its own social limit exposure in order to control the outbreak situation, so people don’t really go out shopping, eating, and using vehicles anymore Retail, Restaurants, and Automotive are also suffering a recession People also focus on buying essential commodities and spend less on clothes or luxury products E-commerce should be the most profited field in this pandemic time People shopping online more than usual created the chance for many e-commerce platforms to develop Supports from the Government COVID-19 caused the firms not to be able to work, many people become unemployed, and the recession of the stock is also worsening this situation Helping out the situation, the government has issued many policies in order to keep as many people employed as possible • • • Firms are able to borrow the money with low interest and long repayment date if the fund is used for paying workers Launching a government subsidy package for people who are unemployed because of COVID-19 pandemic Proposed many big public investment projects in total of 700 trillion VND, 2.2 times the capital disbursed in 2019 These policies are also helping the stock market since the investors can have more trust in the market in general Vietnam's stock market in the coming time In the coming time, the stock market will continue to be supported by positive information The Covid-19 epidemic has now been basically controlled in Vietnam, measures of social distancing have been mitigated, along with government support policies for businesses in difficulty have helped the indicators The economy in August showed signs of improvement compared to the previous month We may believe that the stock market is going to recover quickly However, the epidemic is still happening in a very complicated way in the world, so it is still necessary to have more flexible solutions to respond to the changes of the epidemic, which may affect the stock market significantly The government is expected to remain the control of the COVID 19 situation, and make sure that the public investment projects are working without any corruption Investors should spend their money not only on the companies which have achieved high-value bidding packages but also on the companies which have the capacities to implement those packages, according to Mr Do Thai Hung, CEO of Finpros Investment Joint Stock Company Refferences Hung Le, Minh Son (2020), “Covid-19 sends VN-Index plunging to biggest losing session in 19 years” Retrieved from: https://e.vnexpress.net/news/business/economy/covid-19-sends-vnindex-plunging-to-biggest-losing-session-in-19-years-4066644.html A Guttmann (2020), “Hardest hit brand categories due to COVID-19 per U.S media sellers in 2020” Retrieved from: https://www.statista.com/statistics/1119204/covid19-hardest-hitcategories-per-media-sellers-us/ “Vietnam Ho Chi Minh Stock Index” (2020) Retrieved from: https://tradingeconomics.com/vietnam/stock-market Van Giap (2020), “Vietnam Stock Market in the first months of 2020: Up and down” Retrieved from: https://www.stockbiz.vn/News/2020/7/2/839889/chung-khoan-viet-nam-6thang-dau-nam-2020-thang-tram-dau-tu.aspx Bui Duong (2020), “World and Vietnam stock markets in the first months” Retrieved from: http://tapchitaichinh.vn/kinh-te-vi-mo/tinh-hinh-thi-truong-chung-khoan-the-gioi-va-viet-nam-6thang-dau-nam-325262.html James Chen (2020), “Stock maret” Retrieved from: https://www.investopedia.com/terms/s/stockmarket.asp VTV24 (2020), “Invest in small stocks, be careful with big losses” Retrieved from: https://www.youtube.com/watch?v=E_rnYvXbk2I&t=2s