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VN-Index follows falling global market   2008-10-13 - Viet Nam News

Vietnam's stock markets dropped again last week, matching the downward global trend due to the instability of the world economy.

Last week's stock market performance demonstrated that global stock market action was also affecting the mindset of domestic investors.

The VN-index saw the strongest decrease since its five per cent trading band was implemented on August 18.

Last week's sessions saw decreases every day. The week finished with Friday's trading session ending at 379.06, 18.62 points lower than on Thursday.

On Wednesday, for the first time in seven years, the Bank of England cut interest rates to 4.5 per cent from 5 per cent. Other central banks followed suit in a global effort to offset economic damages from a deepening financial crisis. The European Central Bank cut its rate to 3.75 from 4.25 per cent, and the FED cut the interest rate 0.5 per cent further to 1.5.

With the significant downward plunge of stock markets, some countries decided to close their markets to avoid a collapse. Turmoil in Wall Street has spread all over the world.

Members of the Viet Nam Banks Association met for its regular meeting last week and agreed on a plan to cut short-term deposit rates. Further rate cuts will depend on the mobilising capacity of the banking system in coming weeks and on inflation.

Last week foreign investors continued selling massively with a net sell of VND308 billion (US$18 million). During trading on Thursday and Friday, the selling value was two times more than the buying value. Sell-off volume was the most for DPM with more than one million shares, followed by PetroVietnam Tourism and Services Joint Stock Co (PET) with 500,000 shares, Hoa Binh Construction (HBC) with 440,000 shares and PPC with 200,000 shares.

Last week's stock market performance demonstrated that global stock market action was also affecting the mindset of domestic investors. The domestic consumer price index, GDP and business performance results of listed companies would not be too affected by the long lasting difficulties in global financial markets, predicted Le Tham Duong of the HCM City-based Banking University. Despite his optimism for the domestic economy, however, Duong forecast that due to anxious investors the VN-Index would slide further.

At the Ha Noi Securities Trading Centre, the HASTC-Index also saw strong decreases with the last session dropping 32.15 points to end at 119.87 points. An average of 9.3 million shares changed hands each trading session for a turnover worth VND291 billion ($17.3 million).

During the 5 trading sessions, the HASTC-Index saw only one day of gains, and the downtrend seemed to continue. The HASTC-Index declined to the maximum allowed with the trading band, especially on Friday when the index decreased by 7.28 per cent. The total trading volume last week was also reduced. However, it seemed to recover somewhat during the end of the week, thus improving the liquidity of the market.

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