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Market falls despite prime rate cut
Domestic stock indices continued to fall significantly on Nov. 21, despite the State Bank of Vietnam’s move to cut the prime rate by an additional percentage point to 11 percent.
The central bank lowered the prime rate for the third time in two months as part of its effort to ease businesses’ access to credit and dampen the impact of the deepening global economic downturn on the domestic economy.
The VN-Index slid 6.78 points, or 2.08 percent, to close at 318.96, tracking pronounced slumps on international markets on Nov. 21. Trading volume on the Ho Chi Minh Stock Exchange rose by 10 percent over Nov. 20, however, to nearly 17 million shares, with a total value of 494.38 billion VND (29.4 million USD).
The trading day witnessed 104 gainers overall and 30 losers.
Responding to the State Bank move on Nov. 21, Vietcombank Securities Co said it expected interest rates which were continuously lowered in the past few weeks, along with depressed prices on the domestic stock exchange, should encourage new investment inflows to the stock market as the savings channel becomes less attractive.
Sai Gon Securities Inc analysts agreed, noting in a report that share prices “have been reasonable for long-term investment…. The prime interest rate in Vietnam is seeing signs of being further cut, with pressure from a slowing economic growth as well as rate cuts in other nations in the world.”
Meanwhile, in Hanoi on Nov. 21, the HaSTC-Index slumped 2.43 percent to end the day at 103.9 points, with the debut of 19 million shares of Cai Lay Veterinary Medicine (MKV), Cao Son Coal (TCS) and Deo Nai Coal (TDN). About 6.8 million shares changed hands for a total turnover of 173.4 billion VND (10.3 million USD).
The northern market saw 103 losers and 33 gainers.
VNA
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