Viet Nam News
HÀ NỘI — Vietnamese shares extended gains yesterday, driven by the banking sector on expectations that lower short-term deposit rates would boost lending for the economy and local businesses.
The benchmark VN Index overcame the loss made in the early session to reach a nine-year high of 686.72 points, up 0.3 per cent from the previous day. The southern market index has jumped 5.4 per cent in the last eight sessions.
The HNX Index on the smaller Hà Nội Stock Exchange rose 1 per cent to end at 84.32 points, making a two-day gain of 1.5 per cent since Monday.
The three largest listed banks, Vietcombank (VCB), Vietinbank (CTG) and Bank for Investment and Development of Việt Nam (BID), took the lead on the stock market yesterday.
On Monday, these three banks cut their deposit rates by 0.3 per cent to 0.5 per cent for deposits of less than one year. The deposit rate cut complied with the central bank’s policy, which required commercial banks to save costs to reduce lending rates, in order to boost local businesses and economy.
Analysts and brokerage firms also saw this move as a positive signal to the stock market and for the economy.
“The deposit rate cut proves that the banking sector now has a surplus of available cash and that worries about inflation exceeding 5 per cent have been eased,” Bảo Việt Securities Corp (BVSC) said in a note. “The rate cut will help banks cut their lending interest rates in the near future, which is expected to boost the production of local enterprises.”
More lending also means those banks will earn higher incomes in the near future.
“The stock market will also benefit from the banks’ rate reduction as investors will find stocks more attractive than savings,” BVSC said.
The three largest listed banks made good gains since Monday. CTG rose 1.5 per cent and BID jumped 3.3 per cent yesterday. CTG and BID have gained 3 per cent and 8.8 per cent, respectively, in the last two sessions.
VCB did even better. The stock added 1 per cent yesterday to advance 11.4 per cent in the last one-and-a-half trading weeks.
On the negative side, the market saw two large-cap stocks decline on their business news, Sài Gòn-Hà Nội Securities Corp (SHS) reported.
Property developer Vingroup JSC (VIC) dropped 2.8 per cent after it announced two of its business units – the Vinmec hospital chain and the education establishment Vinschool – will transition from for-profit to non-profit operating models.
Consumer goods producer Masan Group (MSN) plunged 4.4 per cent after the tungsten mining project of its sub-unit Masan Resources was inspected by officials yesterday.
More than 168 million shares worth more than VNĐ3.3 trillion (US$147.3 million) were exchanged yesterday, an increase of 7.1 per cent over Tuesday’s trading value. — VNS