HANOI: Escalating geopolitical tensions between Russia and Ukraine would have a short-term impact on the Vietnamese stock market, but the market still has positive growth prospects in the long term thanks to stable macro factors.

       VN-Index closed last week, the ninth week of 2022, with three gaining sessions, two decreasing sessions, losing 5.95 points, or 0.4%, closing at 1,498.89 points.

       Particularly on Feb 24, when the tension between Russia and Ukraine reached its peak, along with many other global stock indices, the VN-Index lost more than 17 points, with many stocks plummeting.

       Bui Hoang Minh, senior analyst for individual clients at Ho Chí Minh City Securities Corp, said that geopolitical tensions often had a short-term impact on the stock market.

       Regarding the impacts, the Russia-Ukraine tension caused energy prices to rise, leading to rising costs, resulting in inflation in countries around the world. However, rising energy prices is a predictable problem, Minh said.

       According to Minh, if oil prices continue to stay at US$80 to US$90 (RM336 to RM378) per barrel, energy and fertiliser stock groups will benefit and put pressure on the monetary tightening policy decision.

       “Geopolitical tensions will be a major issue in the first and second quarters, but when making investment decisions, investors need to look at a market with long-term economic prospects in the next two-to-three years, with benefitting industries such as real estate, industrial zones, oil exports and retail,” Minh said.

       According to Nguyen Hoai Thu, managing director of VinaCapital’s Securities and Bond Investment Division, the most obvious risk caused by the recent Ukraine issue is inflationary.

       “On the supply side, sanctions and supply chain disruptions can lead to shortages of many basic commodities, which directly increases input prices for businesses.

       “On the demand side, inflation can slow down consumption and investment disbursement in the economy, including public investment, due to high prices and unpredictable fluctuations,” Thu said. — Viet Nam News/ANN