Rate, fuel price cuts fail to lift shares

Investors watch a trading session at Ocean Securities in Ha Noi. — VNA/VNS Photo Tran Viet

HA NOI — Shares declined yesterday on both of the nation's stock exchanges despite the announcement of further reductions in interest rates and fuel prices.

State Bank of Viet Nam Governor Nguyen Van Binh told the National Assembly on Thursday that the cap on deposit interest rates at commercial banks would be lowered by another 2 per cent to 9 per cent per year, effective next Monday.

The Ministry of Finance, meanwhile, also announced on Thursday that petrol prices would reduced by VND800 per litre to VND21,900, the third reduction in the past month.

Many securities analysts said the news had been consistent with forecasts and many investors decided to use the announcements as an opportunity to sell shares at higher prices.

"Substantial deposit interest rate cuts by the central bank, from 14 per cent to 9 per cent within a short span of time, have raised some concern about Government monetary policies and economic performances," FPT Securities Co analysts wrote on the company's website yesterday.

On the HCM City Stock Exchange yesterday, the VN-Index rose to nearly 436 points in the morning before falling to 432.9 by the close of the afternoon session, a decline of 0.35 per cent from Thursday's close. The value of trades was up by over 5 per cent to nearly VND1.2 trillion (US$53.3 million) while volume increased 16 per cent from the previous day to nearly 83 million shares.

SACOM Development and Investment Corporation (SAM) was the most-active share, with 4.2 million traded before it closed up by 1.16 per cent to VND8,700 per share.

Advancers outnumbered decliners by 131-97, while half of the 30 leading shares by market capitalisation and liquidity sank, driving the VN30 Index down by 0.25 per cent to 508.15.

On the Ha Noi Stock Exchange, the HNX-Index also lost over 1 per cent to close at 75.08 points. Value dropped nearly 7 per cent to VND693 billion ($33 million) on a volume of 72 million shares.

PetroVietnam Construction (PVX) was the most-active share nationwide with a whopping 8.2 million trading. It closed unchanged at VND10,300 per share.

Nguyen Tuan, chief of the VPBank Securities Co's analysis division, said the market could rebound in one or two sessions but pricing was probably short-term and increased buys at high prices would be risky.

Foreigners again concluded yesterday as net sellers on both stock exchanges, responsible for a combied net sell of VND30.3 billion ($1.4 million). Since the beginning of this week, they have unloaded shares worth over VND430 billion ($20.5 million). — VNS