Sunday, December 17 2017

VietNamNews

Shares plunge after banker's fraud arrest

Update: August, 22/2012 - 11:25

 

Tellers conduct transactions at an Asia Commercial Bank branch in Ha Noi. — VNA/VNS Photo Tran Viet
HA NOI — Shares fell heavily during yesterday's session as the market reacted negatively to news that Asian Commercial Bank co-founder Nguyen Duc Kien was arrested as police investigate his business activities.

Kien currently is one of the 20 richest people in Viet Nam based on stock reports.

State Bank of Viet Nam Governor Nguyen Van Binh addressed rumours of Kien's heavy involvement in Viet Nam's banking industry and said the State Bank had only received a police report relating to the arrest of Kien based on the fact he had established three companies which had operated illegally.

"Kien was vice chairman of ACB's founding member council which was set up by the bank itself," said Binh. "However, under the Law on Credit Organisations, joint stock banks are not permitted to have such councils. Currently, however, Kien is not a member of the board of management."

He said the State Bank has taken measures to support the liquidity of Asia Commercial Bank (ACB) and other credit organisations in case of run on the banks.

Leaders from other banks – including Sacombank (STB) and Eximbank (EIB) – also said Kien's individual moves did not affect their operations.

"This news still delivered a shock to the stock market, and investors are in a panic," said Kim Eng Securities Co analysts in a report.

Five bank shares listed on the HCM City Stock Exchange all plunged to their floor prices.

Twenty-seven out of the 30 leading shares tracked by the VN30 in HCM City also bottomed out. The VN30 lost nearly 5 per cent to close at 496.39 points. The VN-Index also tumbled 4.7 per cent to end the session at 416.84 points.

The heavy sales pushed trading value up 70 per cent to VND1.2 trillion ($57 million) on a volume of 70 million shares. Normally, increased trading value reflected an improvement, said Kim Eng analysts said. "In this case, however, sellers seem to be very aggressive."

On the northern bourse, the HNX-Index also retreated by 5.24 per cent to 66.95 points. Around 51 million shares changed hands, for an overall market value of VND469.5 billion ($22.3 million).

Nearly 170 codes over 250 decliners plunged to their floor prices, especially blue chips, pushing the HNX30 down more than 6 per cent to 127 points.

ACB, the most influential stock in the HNX30, had a sell surplus of nearly 1.9 million shares yesterday, although it immediately denied the adverse impacts of the bank billionaire's arrest.

The market suffered from a domino effect as mainstay bank stocks were sold heavily.

Yesterday morning, domestic gold prices rose to a three-month high of more than VND43 million ($2,061) per tael (one tael is equivalent to 1.2 ounces). The domestic price of one tael of gold is VND2 million ($96) higher than the world price.

Nguyen Cong Tuong, deputy head of Sai Gon Jewelry Co's business department, said he was unsure about the impact of Kien's arrest on gold prices yesterday but suggested rising global prices might be driving domestic demand. — VNS

Send Us Your Comments:

See also: