HA NOI — Benchmark indices on both of the nation's stock exchanges closed higher yesterday, supported by talk of a likely interest rate reduction and tighter official controls over the gold market.
The deputy director of the State Bank of Viet Nam's monetary policy department, Do Thi Nhung, said that the central bank would soon lower the cap on deposit interest rates from the current 13 per cent per year to 12 per cent per year.
Nhung quoted State Bank Governor Nguyen Van Binh, who recently said that interest rates could be reduced by 1 per cent in subsequent quarters if inflation rate remained below a pace of 11 per cent for year. The consumer price index during the first quarter of the year continued to maintain that pace.
In addition, newly issued Government Decree No 24/2012/ND-CP, to take effect on May 25, will tighten restrictions on gold traders and, by discouraging investors to pour money into gold, is expected to provide an indirect boon to the stock market.
FCL Securities Co general director Pham Duc Thang said the market was often a step ahead of the economy and that interest rates had now peaked and were falling – an important signal for an uptrend in stocks.
"Looking at all of the investment channels available this year, if money doesn't flow into stocks, where does it go that promises an equal profitability rate?" Thang asked.
On the HCM City Stock Exchange yesterday, the VN-Index ended the session 0.74 per cent higher than Friday's close at 450.73 points. Advancers outnumbered decliners by 183-83.
Despite improved investor sentiment, they remained cautious in trading, pushing the value of trades down 37 per cent to just VND909.8 billion (US$43.3 million), while the volume of trades decreased by 27 per cent to just 66.3 million shares.
Twenty-two of the 30 leading shares posted gains, lifting the VN30 Index by 0.81 per cent to 515.64 points. Of these top shares by market capitalisation and liquidity, only real estate developer Vincom (VIC) and dairy giant Vinamilk (VNM) lost value.
Tan Tao Investment Industry (ITA) became the most-active share yesterday with 3.7 million changing hands before it closed up nine-tenths of a per cent to VND11,200 a share.
On the Ha Noi Stock Exchange, the HNX-Index advanced by 2.13 per cent to conclude the day at 76.28 points, with gainers overwhelming losers by a four-to-one margin. Volume dropped 22 per cent from Friday's level, however, to 70.2 million shares, while the value of trades fell 16 per cent to VND707.2 billion ($33.7 million).
Habubank (HBB) continued to lead trades nationwide, with over 8.3 million shares exchanged on ongoing conjecture about its possible takeover. HBB edged up 1.4 per cent to VND7,000 per share.
Foreign investors concluded yesterday as net sellers on both exchanges after a long streak of net buys. They unloaded a combined VND9.65 billion ($460,000) worth of shares. — VNS