Shares climb on rate cut news

VNA/VNS Photo Hoang Hai

Vietcombank yesterday reduced its one-month term deposit rate to 6 per cent per annum, down from the ceiling of 7.5 per cent per annum regulated by the State Bank of Viet Nam. The rates for other short-term deposits (from two months to nine months) are also capped at 6.5-7 per cent.

Positive trading yesterday seemed to have placated investor "thirst" after three weeks of slides since mid-April. According to stock analysts, the interest rate cut, initiated by Vietcombank, may pave the way for another official rate cut by the central bank.

On the HCM City Stock Exchange, the VN-Index climbed 2.75 per cent to finish the session at 488.32 points. Meanwhile, the HNX-Index on the Ha Noi Stock Exchange jumped 2.84 per cent to a close of 60.74 points.

Active trading by both domestic and foreign investors yesterday pushed values on the two exchanges up strongly.

Volume of trades on the HCM City market doubled over Friday's level to 53 million shares, worth VND968 billion (US$46.1 million), up 140 per cent.

Twenty-nine of the top 30 shares by market capitalisation and liquidity on the southern bourse advanced, lifting the VN30 up 2.35 per cent to 551.99 points. Ocean Group (OGC), PetroVietnam Finance (PVF), Gemadept (GMD) and Development Investment Construction (DIG) all hit their ceiling prices.

Mid-cap shares maintained their rises in the afternoon, with 55 codes closing at the ceiling price. They included Tan Tao Investment Industry (ITA), Kinh Bac City Development (KBC), home furniture Duc Long Gia Lai (DLG) and Hoang Quan Mekong Corp (HQM).

ITA was still the most active code by the end of the session, with 4.1 million shares exchanged at VND6,800 each.

Meanwhile, both the trading volume and value of the Ha Noi market soared by 140 per cent over Friday's levels, totaling 55 million shares worth VND380 billion ($18.1 million).

Sai Gon-Ha Noi Bank (SHB) led the market trades with 12.44 million changing hands. SHB gained 6 per cent to be traded at VND7,100 a share.

Foreign investors increased their buys yesterday, picking up shares worth a total net buy of VND168.7 billion ($8 million) on the two exchanges.