Don’t trade on headlines: Dragon Capital chairman

Investors should avoid making snap trading decisions based on headlines and remain calm amid market volatility as Vietnam’s stock market moves in line with global trends driven by geopolitical tensions, said Dominic Scriven, chairman of Dragon Capital.

Recent fluctuations in Vietnam’s stock market are unsurprising as the benchmark VN-Index has closely tracked movements in global markets, Scriven told the media on the sidelines of the recent UK-Vietnam Conference on International Financial Centers.

Financial markets are inherently highly sensitive and act as an immediate reflection of political and economic developments. Escalating geopolitical tensions are having widespread and direct impacts across economies, he added.

As an example, Scriven pointed to the United States, the world’s largest crude oil producer, where gasoline prices have surged by as much as 60% in the past month, underscoring the broader spillover effects on financial markets.

He also noted that rapidly shifting statements and policy signals from U.S. President Donald Trump have heightened uncertainty, making it more difficult for markets to respond effectively.

In such conditions, investors should maintain composure, Scriven advised.

Investors should avoid a mindset of reading the morning news and immediately placing orders. Staying calm is critical, he noted, adding that those unable to withstand news-driven volatility should consider staying on the sidelines.

Scriven said geopolitical conflicts typically drive capital into safe-haven assets, strengthening the U.S. dollar, pushing up interest rates and lifting energy prices, creating headwinds for many economies.

Asia has been particularly affected by rising energy costs, with several economies, including Japan, South Korea, Taiwan and the Philippines, declaring emergency measures in response to energy pressures.

Despite facing similar economic challenges as other emerging markets, Vietnam stands out for its proactive and flexible policy response, Scriven said. He highlighted diplomatic efforts by the Government, including recent engagements by Prime Minister Pham Minh Chinh with Russia, Japan and China.

Scriven added that current market volatility is unlikely to alter Vietnam’s outlook in the upcoming FTSE Russell review, expected to be announced on April 9, noting that overall conditions remain stable and under control.

Vietnam's stock market is expected to acquire a status upgrade to "secondary emerging" in September this year.

Regarding concerns over sustained foreign outflows from Vietnam’s stock market since the start of the year, Dragon Capital maintains an optimistic view. The firm has prepared resources early on to position itself for new capital inflows expected to enter the market, he added.