Retail stocks draw interest despite COVID-19
Retail stocks are becoming attractive assets to many investors after a sell-off on Tuesday despite the market benchmark VN-Index falling.
Retail stocks are becoming attractive assets to many investors after a sell-off on Tuesday despite the market benchmark VN-Index falling.
As the VN-Index plummetted more than 56 points on Tuesday, losing its key level of 1,400 points, most stocks recorded big losses. However, shares bounced back strongly right after the session.
Of which, retail stocks drew more attention from investors with some even hitting the maximum daily gain of 7 per cent and continuing to strengthen in the last trading session, like Mobile World Investment Corporation (MWG), Digiworld Corporation (DGW), Phu Nhuan Jewelry JSC (PNJ) and FPT Digital Retail JSC (FRT).
After losing 7 per cent on Tuesday, MWG shares edged up to 6.97 per cent in Wednesday's trade and jumped more than 2 per cent in the next two sessions.
Similarly, DGW shares jumped nearly 5.5 per cent after posting losses of 6.93 per cent, then rose for the third straight session on Friday.
PNJ and FRT shares also hit the maximum daily gain of 7 per cent on Wednesday.
On Friday, the VN-Index settled down 2 per cent, or 27.54 points, to 1,347.14 points on strong selling pressure.
The rallies of retail stocks were a shock for the market's participants as COVID-19 was having an impact on retailers' activities.
It is believed that the change in customer behaviour to online shopping has helped these companies gain market shares.
In the latest report, VNDirect Securities Corporation (VNDirect) said that retailers witnessed strong growth both in revenue and profit, except for FPT Digital Retail, in the first quarter of 2021, showing the recovery trend post-pandemic.
The securities firm expected that the recovery will continue in the second half of this year to increase retail stocks' appeal.
Big retailers gain market share
According to VNDirect, although the spread of COVID-19 has directly affected retail activities, it also has brought opportunities for large retailers to enhance their networks.
VNDirect believes that retailers with large market shares and strong business results, including Mobile World and PNJ, can benefit from the pandemic and achieve growth in the long term.
Recently, Mobile World continued to carry out new strategies to obtain a greater market share, including a new B2B model and retail bicycle centers, while PNJ executed a series of activities such as cooperation with Pandora in a shop-in-shop method and new stores.
Digital economy
The securities company said the online channel would become more important in the next phase of the retail economy. Companies that have built a good logistics system or a good inventory management system for online channels can enjoy significant growth from the boom of the digital economy. Mobile World, FPT Digital Retail and PNJ have prepared systems to take advantage of the wave, VNDirect added.
Bach Hoa Xanh chain has benefited from the trend of shifting to online shopping instead of brick-and-mortar stores.
Along with the boom of the digital economy, Mobile World's online revenue continued to rise in the first quarter, while FPT Digital Retail's online revenue maintained double-digit growth. PNJ's online revenue grew strongly 400 per cent year-on-year during the period, but the value was still low compared to total revenue.
With the increasing adoption of smart home technology, ICT (information and communication technology) equipment distributors and retailers, including Digiworld, Mobile World and FPT Digital Retail, will take the lead in the trend, especially Digiworld, Xiaomi equipment's distributor. VNS
