COVID severely impacts stock markets in Southeast Asia including VN: conference

Saturday, Nov 27, 2021 07:31

The Research Centre in Business, Economics, and Resources at the HCM City Open University organised the annual Conference on Business, Economics & Resources online on November 25-26 to share research experiences and discuss policy implications for an emerging market like Viet Nam. — Photo courtesy of the HCM City Open University

Stock markets in Southeast Asia including Viet Nam have been severely impacted by the COVID-19 pandemic outbreak, according to studies presented at the annual Conference on Business, Economics & Resources held from November 25 to 26.

Pham Tan Toan of Macquarie University, Australia, said his team’s research found the Philippine and Thai stock markets exhibiting the most volatility.

“We also found that the … outbreak had substantially increased the volatility in all six ASEAN markets.

“Volatility … more than doubled in comparison to the pre-pandemic period.

The research studied six stock markets, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam.

Another study on the impact of the pandemic on stock market volatility through the four outbreaks in Viet Nam done by Vu Thanh Nam and Thai Trieu Vi of the International School of Business under the University of Economics HCM City found that the official announcement of the pandemic during the first three outbreaks adversely affected stock market returns.

The effect was slightly less following the announcement of the fourth wave.

“Construction, real estate and manufacturing stocks were the most affected while information and technology, and financial and insurance services were the most resilient across the four waves of the pandemic.”

Le Thai Thuong Quan of the Ho Chi Minh City Open University, said his research team’s findings indicate that after the COVID-19 breakpoints, the volatility across industries increased by 97 per cent.

“The first and second waves … negatively affected many industries while the fourth wave has only impacted a few industries.

“Transportation, commerce and manufacturing experienced the most significant volatility because their variances are double after the COVID-19 breakpoints.

“Our empirical results confirm that the increase in the daily infection cases appears to amplify the volatility while easing … control measures tend to reduce the volatility at the industry level and for the entire stock market.”

Data from the stock market has been used to examine the effects of government responses and policies.

Do Thanh Trung of Military Bank in HCM City said: “Our findings indicate that the Government responses and economic support are associated with an increase in the order imbalance or an increase in buying. Risks from easing the stringency of policies lead to selling pressure.

“We find that buying is more likely associated with workplace closing, restrictions on gatherings and public transport ban than stay-at-home mandates.”

The conference was organized by the Research Centre in Business, Economics, and Resources at the HCM City Open University, and 48 researches were tabled by local and foreign scholars from Australia, Canada, New Zealand, the UK, the US, and others.

Discussion sessions shared research experiences and considered policy implications for important issues for an emerging market like Viet Nam.

The conference series aimed to provide opportunities for young Vietnamese scholars to present and receive constructive feedback to enhance their research skills and enable their papers to be published in top international journals. — VNS

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