HA NOI — Stocks tumbled yesterday on both of the nation's stock exchanges, even as the central bank announced that it would cut key interbank rates by 1 per cent effective today.
|Transactions are carried out at Viet Nam Investment Securities Co. — VNA/VNS Photo Hoang Lam
Analysts said that news of the anticipated rate cut wasn't strong enough to buoy the market since the expectation of lower interest rates had already been built into prior gains.
And while the deposit interest rates paid by banks have been capped at 13 per cent per year, most enterprises will still have to borrow at costs of 16.5 per cent per year or higher, still a high rate, said Nguyen Tuan, head of the analysis department of FLC Securities Co, in an interview with the newspaper Dau tu Chung khoan (Securities Investment).
"It will take a longer time to reduce lending rates for businesses because banks need to raise sufficient capital at low cost for lending," Tuan said.
On the HCM City Stock Exchange yesterday, the VN-Index extended last week's decline with a loss of 0.95 per cent, concluding the session at 428.02 points. The VN30 Index, which tracks the performance of the 30 leading shares by capitalisation and market volume, also closed down by 1.95 per cent to 477.54 points.
Decliners outnumbered advancers during yesterday's session by a margin of about three-to-one. Of 190 shares shedding value, 99 plunged to the floor.
Bank shares continued to fall with four out of five listed banks declining. Vietinbank (CTG) dropped to the floor while others declined by 1.2-3.9 per cent. Military Bank (MBB) and Sacombank (STB) led the market by volume with over 7 million shares traded each, but while STB closed up by 4.1 per cent, MBB shares finished down by 3.36 per cent.
As investors became more cautious, market value shrank by 23 per cent compared to Friday's level, totalling VND1.15 trillion (US$54.8 million) on a volume of nearly 74.8 million shares.
On the Ha Noi Stock Exchange, the HNX-Index also slid by 3.21 per cent to close yesterday's session at 69.26 points. Volume fell 15.4 per cent from Friday's session to just 59 million shares, while value of trades dropped by 17.5 per cent to VND551.86 billion ($26.3 million).
Losers outnumbered gainers by 201-83, with PetroVietnam Construction (PVX) becoming the most-active share with 6.2 million traded. PVX closed down 5.1 per cent to VND9,300 per share.
Foreign investors concluded yesterday as net buyers on the HCM City bourse, picking up VND43 billion ($2 million) worth of shares, but they were net sellers on the Ha Noi bourse, responsible for a net sale of shares worth VND16.3 billion ($776,200). — VNS