Vietnam stock market soars on rising confidence

Apr 13, 2009, 8:06 GMT

   Hanoi - Vietnam's stock market soared Monday, with some investors expecting it will soon regain the 400-point level.

   The VN-Index ended the day up 4.6 per cent, or 14.96 points, to close at 340, the largest one-day gain since October 14, 2008.

   Market volume was low at 24.3 million shares, valued at 599 billion dong (39 million dollars).

   The Vietnamese market is up 21 per cent this month, after gaining 15 per cent in March.

   'Traders are very optimistic about the rebound of the market,' said Phan Hong Quan, director of Europe Capital Securities in Hanoi. 'Moreover, they cannot find attractive investment opportunities in bank interest rates or gold.'

   The State Bank of Vietnam (SBV) has set its benchmark interest rate at 7 per cent since January 23, a rate investors see as low given uncertainty over inflation and exchange rates.

   'My confidence has been restored, as the market has been doing well since the beginning of the month,' said Nguyen Thu Nga, a trader at Kim Long Securities in Hanoi. 'I want to buy in before the prices go too high.'

   Quan said the rapid rise did not reflect the fundamentals of Vietnam's economy, hit hard by falling exports since the onset of the global economic slowdown last summer.

   'Statistics show Vietnam's economy has not emerged from its difficulties,' Quan said. 'The Vietnamese media seems to be covering the economy with unfounded optimism.'

   Vietnam's stock market fell 65 per cent in 2008, dropping to a low of 235 points, after peaking at 1,174 in March 2007.