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VN-Index dives to lowest level since 2006   2008-11-22 - Reuters

Ho Chi Minh City stocks fell to their lowest level in almost three years as the US market plunged to multiyear lows.



There was a frantic sell-off soon after the opening bell that sent the benchmark VN-Index down as investors reacted nervously to news from Wall Street on Thursday.

Most of blue chips dipped into the red, with Saigon Securities Inc., Sacombank, construction firm Sudico and software developer FPT Corp. falling by the daily maximum limit of 5 percent.

The market edged up early in the second session before falling back into negative territory.

The VN-Index, which is made up of 166 firms and four closed-end funds, finally closed 6.78 points, or 2.08 percent, down at 318.96, its lowest level since February 2, 2006. Trading volume was 17.6 million shares as 104 shares declined, 36 remained unchanged and 30 advanced.

Wall Street shares plunged Thursday as panicked investors made a frenzied rush out of stocks and into bonds in the face of more weak data and a breakdown in efforts for a bailout for automakers.

The main broad-market indicator sank to an 11 1/2-year low as investors ran for cover, sending bond yields to all-time lows.

The Dow Jones sank to a fresh five-and-a-half year low, losing 444.99 points (5.56 percent) to end at 7,552.29 a day after a 427-point slide.

The Nasdaq fell 70.30 points (5.07 percent) to 1,316.12, its lowest close since 2003. The broad Standard & Poor's 500 plummeted 54.14 points (6.71 percent) to 752.44, the lowest finish since April 1997.

Nguyen Hai Son, a broker at FPT Securities Co., told Thanh Nien Daily that Friday’s fall sent shares in many large well-run companies like Sacombank, FPT Corp. and steel maker Hoa Phat Group down to a very attractive level.

“The minor rally early in the second session showed signs of demand for shares. I expect the market to bounce back slightly next week.

“Stocks have fallen around the world in the last few days and so has the VN-Index. Vietnam’s macro economy is good, but its export markets will shrink. That discouraged investors,” Bloomberg quoted Nguyen Mien Tuan, director of HCMC-based Viet Dragon Securities Co., as saying.

“News in the US is still gloomy. Citigroup said it would cut jobs and the auto industry is also experiencing a tough time. Investors already expected the central bank’s rate cut Friday so it doesn’t help much for the stock market. Investors are more concerned about slower economic growth, a decline in export orders, and the poor performance of small and medium-sized companies.”

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