Business News
Vietnam stock market hits eight month low
Aug 12, 2010, 11:00 GMT
Hanoi - Vietnam's stock market plunged Thursday, reflecting the previous day's plunge on Wall Street and scant expectations of government action to counteract the downward trend.
The VN-Index ended down 3.17 per cent to close at 448, the lowest level since December 18, 2009.
'Local traders' sentiments are very bad now,' said Dao Viet Anh, an analyst at FPT Securities.
Traders came under pressure to sell shares to meet their margins when the index fell below 450, Anh said.
'The government has failed to bring down interest rates, resulting in a cash outflow from the stock market,' said Nguyen Thi Huong, a trader at Sacombank Securities.
The government last week asked banks to reduce interest rates, but banks have not done so. Rates on deposits are running at 12 per cent. Rates on loans are running between 15 and 18 per cent, leading many companies to issue stock in lieu of borrowing.
'So many companies have issued new shares, diluting the market,' said Huong. 'Traders who hold cash don't want to buy now as they are fearful that the share price will keep falling over the next few days.'
'The prices of stocks are very attractive now,' said Anh. 'Traders should remember that when everyone panics, we should be eager to buy, and when everyone is eager to buy, we should panic.'
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