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Key rate cut fails to inspire stock market
The Ho Chi Minh City stock market Wednesday dropped for a third straight day after an early surge triggered by an official interest rate cut petered out.
The VN-Index, a gauge of 167 firms and four closed-end funds, began the day by climbing 0.45 points to 307.9 in the first session. But it then turned in the second session and finished the day at 306.22, 0.4 percent lower.
Investors remained cautious despite the latest good news for the local economy. The central bank said it would slash the key rate to 10 percent from 11 percent, effective from December 5, while Prime Minister Nguyen Tan Dung asked the Ministry of Finance to allocate US$1 billion to prevent an economic slowdown.
“The rate cut and the government's $1 billion stimulus package are definitely good news for the economy, but it will take some time for it to have any concrete effect on the economy and the market,“ Bloomberg quoted Pham Thanh Thai Linh, an analyst at Hanoi-based Bao Viet Securities Joint-Stock Company, as saying.
“The rate cut will be good for borrowers, but the question is whether companies are willing to borrow in this difficult time when Vietnam's major export markets such as US and Japan are in an economic recession, slowing demand.
“Regarding the $1 billion package, the government says it will spend it on infrastructure projects. It means construction, cement and steel companies will benefit from the package.
“However, I think it'd be better to wait for a couple of months before buying shares of these companies because as I said, it is premature to talk about a recovery in the market in short-term.”
Trading volume remained low, with 8.9 million shares changing hands. Among the index members, 92 dropped, 47 gained and 32 were unchanged.
Foreign investors continued selling off shares, shedding around 64 billion ($3.8 million) while picking up 45 billion ($2.7 million).
Can Tho Techno-Agricultural Supplying Joint-Stock Company, one of Vietnam's biggest fertilizer importers, advanced VND1,400, or 3.7 percent, to close at VND39,000. The company will pay a dividend of VND2,000 per share on December 31, according to a statement posted on the exchange’s website, after the market closed Tuesday.
Ben Tre Forestry and Aquaproduct Import Export Joint Stock Company rose VND700, or 4.8 percent, to VND15,400 at the close. The company registered a 1.5 million share buyback, according to the website.
Thao Vi
Thanh nien
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