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SSC widens daily trading bands
The State Securities Commission (SSC) this morning, April 3, decided to widen the daily trading bands to +/-3% from +/-2% for the Hanoi Securities Trading Centre (HASTC) and to +/-2% from +/-1% for the HCM City Stock Exchange (HOSE).
The new daily trading bands will become valid as of Monday, April 7, 2008.
SSC had narrowed the trading bands in an attempt to stop the prices of stocks from sliding.
The decision has helped calm investors down and stopped the market from declining. The stock market has turned around and the VN Index increased in the last six trading sessions. However, the market now shows shortcomings in liquidity, and this is one of the reasons that SSC has reconsidered the trading bands.
It is now clear that SSC is planning to bring the trading bands back to their initial levels gradually. A quick resumption is feared will cause shocks to the market.
Analysts think that SSC is wise in widening the trading bands gradually. The +/-1% trading band increase will help improve liquidity but prevent stock prices from falling dramatically.
However, analysts say that adjusting the daily trading bands is just a temporary administrative intervention in the market, while the market still requires other comprehensive measures to recover. Among the ‘comprehensive measures’, they say that the banks’ halting of selling mortgaged shares is the most important measure.
It is expected that SSC will soon release detailed information about its plan to adjust the trading bands and measures it will employ to support the market.
VNN
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