Vn index fund

PVCoating’s worker moving piles. The company shares lost 12.4 per cent in market capitalisation last week. — Photo ptscthanhhoa.com.vn

Even though the stock market fell last week, analysts from securities firms said that investors’ bullish sentiment can continue to support the benchmark VN-Index reaching 1,400 points this week.

The VN-Index on the Ho Chi Minh Stock Exchange (HoSE) closed last week at 1,351.74 points, recovering on the back of large-cap stocks. But for the week, the index still lost 0.5 per cent.

On the Ha Noi Stock Exchange (HNX), the HNX-Index rose 1.72 per cent last Friday to 316.69 points. The index, however, slightly declined by 0.6 per cent for the week.

After plummeting due to strong profit-taking activities earlier last week, the market rebounded later in the week as risk appetite increased.

The market also received support from the improvement of the overload order problems and the comeback of foreign investors after net selling for eight consecutive sessions.

Analysts from MB Securities Corporation (MBS) said that the market was showing investors’ optimism. The positive sentiment would continue throughout this week, helping the market in the race to the 1,400 point-level.

On the technical front, MBS thought that the strong recovery of the market in late sessions last week ended the correction period around 1,300 points, creating momentum for the market to enter a new rising wave.

“With the current strong rally, we think the market can head to the target of 1,400 points in the coming sessions,” MBS said.

SSI Securities Corporation (SSI) also expressed optimism. “The VN-Index followed a positive scenario once there was confirmation about the recoveries of large-cap stocks, as well as the even spread of cash inflows,” SSI said.

“Therefore, there is the possibility that the VN-Index will continue to reach higher in the near future and head toward the target zone of 1,400 points.”

According to BOS Securities Corporation (BOS), technically, the market benchmark breached the resistance level of 1,350 points on strong demand, along with weaker selling pressure. This made some technical indicators reverse and showed positive signs in the short term.

However, cash flow warned about the possibility of weaker demand in some coming sessions. The VN-Index is likely to maintain its rally and head back to its previous peak of 1,370 points this week.

“Nevertheless, selling pressure is expected to increase during rallies, making the market face some more fluctuations,” BOS added.

Meanwhile, Saigon – Hanoi Securities JSC (SHS) said that the market corrected after five straight weekly gains, but last week’s market liquidity remained at a high level with an average of nearly VND31.3 trillion (US$1.36 billion) per session on both bourses, which showed relatively strong selling pressure.

SHS forecast that the market might see some corrections when selling pressure rises at the current level.

As the market corrected last week, most pillar stocks edged down. Of which, gas and oil stocks fell the most in market capitalisation, down 5.7 per cent. PetroViet Nam Coating JSC (PVCoating, PVB), PetroVietnam Oil Corporation (OIL), PetroVietnam Drilling & Well Services Corporation (PVD), Binh Son Refining and Petrochemical Company Limited (BSR) and PetroVietnam Technical Services Corporation (PVS) all posted losses of more than 5 per cent in market cap.

They were followed by utilities and banking sectors, down 4.3 per cent and 3.8 per cent, respectively.

Foreign investors were still net sellers last week as they net sold a value of VND730 billion (US$32 million). But this amount was lower than that of the week before, which was nearly VND6.2 trillion (US$267.8 million). —VNS

A worker wears protective clothing while working at Golden Logistic Co Ltd in the northern province of Bac Ninh. Every stage involving transportation, warehousing, regular health check-ups for workers and drivers transporting goods in pandemic-hit areas is all in strict compliance with guidelines for disinfection and sterilisation. — Photo courtesy of Golden Logistic Co Ltd

The COVID-19 health crisis and resulting wide-ranging and deeply-felt economic upheaval has flipped the logistics industry on its head, leaving ill-protected freight firms in dire need of emergency State support to survive hardships.

Mandatory preventive measures among nations to contain the spread of the pandemic has resulted in disrupted trade flow and fragmented supply lines, dealing a blow to the logistics industry, which is viewed as an auxiliary for trade and commerce, enabling other industries to deliver goods and services to consumers.

Factories reducing production or suspending operations has led to a curtailment in the transportation and delivery of goods in the supply chain, greatly affecting the operation of logistics companies.

Shrinking orders, surging costs

“Right from the early stages of the COVID-19 outbreak, the number of freight orders received by logistics companies in Bac Ninh fell sharply, at the same time, the delivery of goods, storage and warehousing activity is slowed and disrupted,” Nguyen Hoai Nam, sales manager of Golden Logistic Co. Ltd. in the northern province of Bac Ninh, told Viet Nam News.

“Following government guidelines on COVID-19 prevention and control, we businesses are making a continuing effort to realise the dual goal of maintaining production while ensuring work-related safety during the pandemic, prioritising workers’ health,” he said.

Every stage involving transportation, warehousing, regular health check-ups for workers and drivers transporting goods in pandemic-hit areas was all in strict compliance with guidelines for disinfection and sterilisation. But this had resulted in a surge in operational costs.

Travel restrictions also led to worsening shortages of truck drivers to pick up containers, he said.

“Multiple unexpected costs have pressured logistics service providers. However, it is time both manufacturing enterprises and logistics enterprises need to work together,” Nam said.

Logistics costs in Viet Nam account for about 20 per cent of the goods value, which is relatively high compared to the average costs over the world.

“However, devastating consequences caused by the prolonged pandemic, together with the rising prices of warehousing and freight services, makes logistics costs continue to increase, putting great pressure on businesses,” Nam said.

Businesses also faced a significant reduction in revenue from goods exported and imported from pandemic-affected countries. Commodities shipped to Viet Nam dropped dramatically, those undergoing customs clearance were strictly quarantined. Delivery times from suppliers in the Asian market and some other regions is reportedly longer.

According to statistics of the Viet Nam Logistics Business Association, up to 50 per cent of enterprises providing logistics services of all types experienced a downturn in activities and revenue. Air and road transportation services were hit the hardest.

Roughly 80 per cent of the association’s members are micro, small and medium enterprises, thus many of them are on the brink of collapse, meaning workers are losing their jobs.

In Viet Nam, infection cases were detected at large-scale industrial parks of Bac Ninh and Bac Giang, causing many disturbances in the production lines of enterprises, which inevitably placed a direct impact on logistics enterprises.

Tax payment postponement

A report summarising recommendations of businesses and associations in April-May 2021 has been submitted to the Prime Minister by the Private Sector Development Research Board (Board IV), under the government’s Advisory Council for Administrative Procedure Reform and Young Presidents’ Organisation (YPO).

In the report, Board IV said amid the pandemic, manufacturing enterprises in industrial parks, logistics and transportation businesses suffered, causing economic hardship and supply chain disruption.

Exporting enterprises confronted great challenges due to worsening shortages of containers and merchant ships on a global scale, as well as skyrocketing fees.

Board IV, therefore, recommended the Government consider and direct ministries, branches and localities to simplify administrative processes or consider according to priority for import and export processes, as in the priority just applied to the export of Bac Giang lychee.

This would help businesses optimise time and costs in the domestic stages to speed up the import procedures for essential goods or accelerate the export of agricultural products and other key export commodities.

Le Duy Hiep, Chairman of the Viet Nam Logistics Service Association (VLA), said in light of COVID-19 developments, in order to support logistics businesses, VLA proposed the Government grant a reduction of 50 per cent on corporate income tax for 2020 as a way to support businesses to overcome hardships.

It also proposed the extension and postponement for employers’ tax payment, their contributions to the Social Insurance Fund, Unemployment Insurance and Health Insurance Fund, Hiep told Viet Nam News.

VLA’s recommendations on tax payment extension have been approved by the Government. However, “this takes time and many procedures are required by the banks,” Hiep said.

Decisions on petrol retail price reduction benefited both businesses and the whole economy, he said.

The Viet Nam Maritime Administration in May last year decided to reduce the pilotage fee by 10 per cent for Vietnamese shipping enterprises operating on domestic routes, as a support measure amid the COVID-19 pandemic.

Hiep said Viet Nam’s logistics costs were still higher than the regional and global averages of 16-20 per cent.

“We are trying to reduce the cost to equal other countries in the region, such as Thailand at 14-15 per cent and Singapore at 8-10 per cent,” Hiep told Viet Nam News.

The government targets that by 2025, the contribution of logistics services to Viet Nam’s GDP will touch 5-6 per cent, with the growth rate of logistics industry reaching 15-20 per cent, the rate of outsourced logistics services at 50-60 per cent, achieving Global Logistics Performance Index at 50 or higher.

Logistics enterprises should urgently apply IT solutions, modernising management and operation methods, use software systems and logistics optimisation platforms to cut costs and improve service quality, Hiep said.

They should promote linkages with other logistics providers and with manufacturing enterprises in order to create competitive advantages in negotiation and improve service provision capacity, Hiep said.

VLA would actively co-ordinate with localities and manufacturing companies to devise solutions promoting the transportation and circulation of goods, ensuring safety amid the pandemic, at the same time applying supportive measures such as reducing freight, storage and warehousing costs.

Trade centres and supermarkets should consider augmenting the purchase of agricultural products from farmers in pandemic-hit localities such as Bac Giang, he said. — VNS