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Nothing seems to be able to stop the slide   2008-05-21 - VNS

An Binh Bank Securities staff handle orders at a new office in the city of Can Tho. — VNA/VNS Photo Hoang Hai

The State Bank of Viet Nam’s decision over the weekend to raise the prime rate to 12 per cent, expected to be a boon to struggling commercial banks, seems to have done little overall to snap the gloom on the stock market, with share prices continuing to fall yesterday.

The VN-Index dipped another 6.43 points yesterday, or 1.41 per cent, to close at 449.24.

It was the twelfth straight day of losses for the HCM City Stock Exchange, a run that has seen the Index lose a cumulative 73.12 points, equivalent to 14.08 per cent of its value.

Volume in yesterday’s trading was just over 4.96 million shares, worth about VND173.42 billion (US$10.8 million). Foreign investors were net buyers of 643,000 shares.

Of 154 listed codes, 10 were gainers while 132 others hit their floor prices.

Phu My Fertilisers (DPM) remained the most active share with a volume of 551,250 shares, although the price continued to fall, off 0.9 per cent to close at VND45,100 per share.

"While higher deposit interest rates of 12 per cent or more will solve the problem of lack of capital for commercial banks, it will also compound difficulties in borrowing for other businesses, leading to declining economic effect," said the director of analysis and investment of Hoa Binh Securities, Nguyen Huy Duong.

"The stock market is considered a microcosm of the general economy," Duong said. "Unlike the Asian economic crisis in 1997, the world prices of gold and oil have made an impact on the domestic market in general and on the stock market in particular. It’s really difficult to predict the trend of the stock market now."

In Ha Noi yesterday, the HASTC-Index closed down 2.53 points, or 1.84 per cent, to 135.21. Trading volume saw a modest decline of 15 per cent, with only 1.13 million shares changing hands at a total value of VND25.5 billion ($1.59 million).

Foreign investors were net buyers on the day, picking up 258,400 shares and unloading 10,200 shares.

PetroVietnam Insurance (PVI) attracted foreign investors, making it the most heavily traded share on the northern bourse yesterday at 230,000 shares.

Penny stock Bim Son Cement (BCC) made the day’s sharpest gain, hitting its ceiling price to close at VND14,700.

Ha Noi Securities Trading Centre yesterday welcomed a new listing, Yen Bai Cement and Minerals (YBC), bringing the centre’s total number of listings to 137.


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