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Slow trading to shut Vietnam gold floors ahead of deadline   2010-01-31 - Thanh Nien, DTCK

 
 
A woman talks on the phone at Asia Commercial Bank’s gold trading floor in Ho Chi Minh City  
Vietnam gold exchanges said they would close far ahead of the government’s deadline due to a halting decline in trading volumes.

 

Earlier this month, the State Bank of Vietnam told banks to halt lending for gold investments and said all loans made to buy the precious metal must be repaid, after announcing last month that the country’s 20 gold trading floors must close by March 30.

As bank lending accounted for 93 percent or more of the total money traded on the floors, gold trading has plunged dramatically since mid-January.

The trade volume at EximbankSJC (Saigon Jewelry Holding Co.) floor has decreased to several dozen thousand taels a day from the daily average of 200,000 taels before the decision to close gold exchanges was announced. A tael is equal to 37.5 grams.

The Sacombank-SBJ (Sacombank Jewelry Co.) floor, which was once known as having the country’s largest trade volume of around 500,000 taels a day, only saw 10,000 taels traded on January 23.

Other floors such as the Asia Commercial Bank (ACB), VietA Bank, the Vietnam Gold Business (VGB) and the Vang The Gioi (VTG or World Gold) have suffered the same from the decision with trade volume down to 500-600 taels a day, a quarter of what it was before the central bank’s instructions.

The gold exchange at VietA Bank will close February 11 as trade volume has dropped by 90 percent, said Vo Van Khang, deputy general director of the bank and manager of its gold trading floor.

Eximbank, or Vietnam Export and Import Bank, stopped lending for investment in gold more than two weeks ago and announced it would collect the money it had already lent.

A deputy general director at Eximbank said the lender’s gold trading floor might be closed before Tet, which falls in mid-February this year, if trading continued at such a slow rate.

Meanwhile, ACB has cut the trading time on its gold exchange from 24 hours a day the entire week to between 7:30 a.m. and 5 p.m. from Monday to Friday, starting January 25.

Outside that time, investors can process gold trading via the Internet or ACB’s call center, according to a bank notice last Friday.

Lay-offs

The exchange managers said there would be little time for them to transfer employees from the floors to other positions as the market had lost steam so quickly. Eximbank said it had not figured out what to do yet.

While most banks said they would try to have gold exchange staff move to other positions, mere gold exchange operators such as VGB and VTG have anticipated large future lay-offs.

Tran Thanh Hai, general director of VGB, said his outfit had considered launching a goods trading floor. He said the company planned to dismiss around 30 percent of its current 130 employees.

Some gold trading floors have considered focusing on physical gold instead but the bullion market has also cooled recently with hesitant investors driving prices down.



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