Vietnam stock market tumbles after electricity price hike

Feb 21, 2011, 5:33 GMT

Hanoi - Vietnam's stock market Monday suffered its biggest drop in 15 months after the government raised electricity rates.

Prime Minister Nguyen Tan Dung approved a plan to raise the average retail electricity price up 15.3 per cent from March 1, the Ministry of Trade and Industry said Monday.

The VN-Index ended on Monday down 4 per cent, at 483.6 points, the biggest one-day drop since November 25, 2009.

'Many traders were concerned about the instability of macroeconomy,' said Nguyen Truong Son, an analyst at FPT Securities in Hanoi. 'I think the market will drop further.'

The increase, although lower than the 18 per cent proposed by the ministry last Tuesday, has stoked inflationary pressures, local media reported.

Observers said the electricity hike would add more pressure on the consumer price index, which rose 1.7 per cent month-on-month in January, bringing accumulative inflation to 12.8 per cent from a year earlier.

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