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Lower petrol prices ease market fall

In Uncategorized on October 10, 2008 at 4:59 pm

Local stock indices kept falling as uncertainty in world financial markets continued. — VNS Photo Viet Thanh

HA NOI — Lower domestic petrol prices helped to slightly diminish the fall of local stock indices yesterday, as no signs of improvement were seen in the global financial market arena.

The retail price of A92 petrol was slashed by VND500 (3 US cents) per litre nation-wide by the Ministry of Finance yesterday to VND16,500.

The VN-Index slipped another 12.91 points or 3.12 per cent to close at 401.33. Liquidity improved, however, as trading volume increased 46.5 per cent to reach 14.65 million shares, with a total turnover of VND432.7 billion (US$26.2 million).

The HCM City Stock Exchange witnessed 127 losers yesterday, with most of them hitting the floor of the trading band. As many as 24 gained, while 13 remained unchanged.

Orders for Sacombank (STB), the most active code during the day, was 4.17 million shares, 2.5 times higher than Tuesday’s figure. This was followed by Phu My Fertilisers (DPM) with 1 million shares traded and Hoa Phat Group (HPG) with 515,000 units.

Foreign clients yesterday bought 1.6 million shares and unloaded 2.68 million units, with a net sales value of VND43.68 billion ($2.65 million).

The Ha Noi Securities Trading Centre meanwhile saw 128 losers and 18 winners.

The HASTC-Index closed 7.45 points lower, 5.52 per cent, to end at 127.53. Trading volume rose 43 per cent to more than 10 million shares for a total revenue of VND318.46 billion ($19.3 million).

Asia Commercial Bank (ACB) showed the most action on the northern market with 1.38 million shares changing hands. Petroleum Technical Services Corp (PVS) was next with about 812,000 shares traded, followed by Vinaconex Corp (VCG) with 560,000 units.

The domestic market would continue to see a downward trend following the US market moves, said Hoang Thi Hoa, director of Viet Capital Securities’ Research and Analysis Department.

“The market may determine a clearer trend at the end of this month when companies finish releasing their third quarter business results and some macro-level indexes are announced,” she said.

In the next few months, information that might influence the local exchange would be the possibility of [another] petrol price adjustment, the banking system’s credit growth and lower lending interest rates, said Hoa.

“The market enters the fourth quarter with great concern, because the domestic economy depends largely on export; the world economy is forecast to face more difficulties with the US financial crisis,” said Hoang Thach Lan, director of SME Securities’ Securities Investment Analysis.

Lan said the local market was feeling indirect impacts of the global recession through difficulties weighing down enterprises.

SME Securities data shows about 30 out of 160 companies listed on the HCM City Stock Exchange had cumulative turnovers for four quarters (from the third quarter of 2007 to the second quarter of 2008) shrink compared with the same period in 2006-2007.

Lending rates were still high, which would expand companies’ costs and diminish their profits between now and the end of the year, said Lan.

“However, the market may rebound at the end of the year as the prices of big stocks are getting attractive,” he said. —

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