Tuesday, March 25, 2008

Vietnam shares fall to 16-month low

* Down seventh day in a row

HANOI: Vietnam shares fell for the seventh session in a row and closed at a 16-month low on Monday as recent government plans to buy stocks failed to boost investor confidence.

Traders said a plan announced on March 6 by the state investment arm, the State Capital Investment Corp, to buy shares, had made little difference to the fledgling $14.6 billion exchange. Few details were disclosed about the plan. A liquidity crunch in recent months partly created by central bank monetary tightening policies to tame double-digit inflation has hit markets.

“The market is in desperate need for good news to regain investors’ confidence but there isn’t any,” a Hanoi-based stock market analyst said. “Government measures seem to have little lasting impact.”

The Ho Chi Minh Stock Exchange lost 4.5 percent to close at 521.07 points, the lowest since Nov 7, 2006; the month Communist-ruled Vietnam won approval to join the World Trade Organisation.

The index has fallen 20 percent in seven sessions. The Vietnam index is down 44 percent this year, making it the worst performing index in Asia. The over-the-counter Hanoi Securities Trading Center fell seven percent to 178.6 points on Monday.

On March 10, the State Bank of Vietnam widened the trading band of the heavily managed currency to +/-1 percent of the official rate from +/-0.75 percent, one of a series of moves aimed at tackling inflation. reuters