Business News
Vietnam market drops on first day after lunar New Year
Feb 2, 2009, 9:07 GMT
Hanoi - Vietnam's stock market fell more than 5 per cent Monday on concerns about both international and domestic economic weakness.
The VN-Index closed down 5.69 points, or 1.87 percent, at 297.5, the lowest level since January 1.
'Traders are very reluctant to buy at this time, as global markets have not shown clear recovery signals,' said Phan Hong Quan, director of Eurocapital Securities in Hanoi.
Nearly half of the companies listed on the exchange reported losses or lower profits in the final quarter of 2008, he said.
Vietnam's State Bank cut the benchmark interest rate from 8.5 per cent to 7 per cent effective February 1, but that did not succeed in turning investor sentiment around.
'I decided to sell stocks today because with more and more companies reporting losses in the fourth quarter, traders have no choice but to cut their losses,' said Nguyen Thu Nga, a trader at FPT securities. 'The VN-Index will slide to 280 points sooner or later this month.'
'I think the market will not show recovery signals at least after Q3,' Quan said.
Monday was the third day the index ended below 300 points since December, after passing the milestone on its way up in October 2005.
Vietnam's stock market lost 65 percent of its value last year. It peaked at 1,174 points in March 2007.
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