Impact of Covid -19 on Vietnam's stock market, 2022

MINISTRY OF EDUCATION AND TRAINING THE STATE BANK OF VIETNAM

HO CHI MINH UNIVERSITY OF BANKING

LUU THANH HUONG

IMPACT OF COVID-19 ON VIETNAM’S STOCK MARKET

GRADUATION THESIS

MAJOR: FINANCE – BANKING

CODE: 7 34 02 01

HO CHI MINH CITY, 2022

MINISTRY OF EDUCATION AND TRAINING THE STATE BANK OF

VIETNAM

HO CHI MINH UNIVERSITY OF BANKING

NAME: LUU THANH HUONG

STUDENT CODE: 050607190189

CLASS: HQ7-GE16

IMPACT OF COVID-19 ON VIETNAM’S STOCK MARKET

GRADUATION THESIS

MAJOR: FINANCE – BANKING

CODE: 7 34 02 01

ACADEMIC ADVISOR

DR. NGUYEN DUY LINH

HO CHI MINH CITY, 2022

i

ABSTRACT

The outbreak of COVID-19 hurt the socioeconomic activities and stock

markets of many countries around the world. Although Vietnam is one of the

countries that responded well to COVID-19, its impact on the economy is not small.

Especially for the Vietnamese stock market. The purpose of this paper is to examine

the impact of the COVID-19 pandemic on the Vietnamese stock market. Event

Study is the main methodology of this thesis. The three events selected for the study

include: (i) On March 30, 2020, the Government issued a directive to implement

nationwide social distancing; (ii) On July 28, 2020, announced the implementation

of social isolation in Da Nang; and (iii) On July 9, 2021, Ho Chi Minh City applied

directive 16. The paper shows that the effects of the three events on stock prices are

inconsistent. The cumulative abnormal return (CAR) is negative after the first and

third events are announced, but the CAR is positive after the second event is

announced. Of the three events, the stock price response to the first event was

insignificant, while the other two events were statistically significant after the event.

The results from this study add further insights into the effects of disease on stock

price responses.

ii

DECLARATION

I honestly declare that this graduation thesis entitled ―Impact of COVID-19

on Vietnam’s stock market‖ is the result of my original research work under the

guidance of Dr. Nguyen Duy Linh, my academic advisor.

This thesis has never been submitted for a bachelor's degree anywhere else

before. This thesis is the result of the author's own research, and the results of the

research are trustworthy. The thesis does not consist of any previously published

content or content made by others, except for citations that are fully cited in the

thesis.

Ho Chi Minh City, November 2022

Luu Thanh Huong

iii

ACKNOWLEDGMENT

First and foremost, I would like to express my sincere thanks to Dr. Nguyen

Duy Linh, the supervisor who directly guides my thesis. From the comments, the

guidance is extremely valuable. It has created the best conditions for me to

complete this thesis. I would also like to express my sincere thanks to the teachers

at the Ho Chi Minh University of Banking, who devotedly imparted knowledge

during my study at the school. I am also very grateful to my family, friends, and

relatives, who have always been by my side to encourage me throughout the process

of completing the thesis.

iv

TABLE OF CONTENTS

ABSTRACT............................................................................................................... i

DECLARATION...................................................................................................... ii

ACKNOWLEDGMENT......................................................................................... iii

TABLE OF CONTENTS........................................................................................ iv

LIST OF ABBREVIATIONS................................................................................ vii

LIST OF TABLES ................................................................................................. vii

LIST OF FIGURES ............................................................................................... vii

CHAPTER 1. RESEARCH OVERVIEW ..............................................................1

1.1. Introduction.......................................................................................................1

1.2. Research situation related to the thesis content ................................................2

1.3. Research objectives ..........................................................................................3

1.3.1 Overall objective .........................................................................................3

1.3.2 Specific objectives.......................................................................................3

1.4. Research questions............................................................................................4

1.5. Research subject and scope of study ................................................................4

1.5.1 Research subject..........................................................................................4

1.5.2 Scope of the research...................................................................................4

1.6. Research methods.............................................................................................4

1.7. Thesis structure .................................................................................................5

CHAPTER 2. LITERATURE REVIEW................................................................7

2.1. Theoretical basis...............................................................................................7

2.1.1 Securities market .........................................................................................7