On the HCM City Stock Exchange, the VN-Index showed signs of recovery during the latter half of the session, but still closed off 1.14 per cent overall to just 441.60 points, its lowest level in the past two months.
Vu Kim Phung, head of analysis for MHB Securities Co, said the pressure to sell shares earlier pledged as collateral increased as the VN-Index fell to 438, particularly with lending interest rates at several commercial banks reaching 20 per cent per year.
However, increased demand for underpriced blue chips cushioned the fall and pulled the Index back above 441, he said, noting that Masan Group (MSN) closed up 3.3 per cent, Bao Viet Holding (BVH) 0.8 per cent, and Hoang Anh Gia Lai (HAG) 0.6 per cent.
The volume of trades soared over 74.6 per cent above the previous day's level to more than 43.9 million shares, and the value of trades rose 67.6 per cent to over VND1 trillion (US52 million).
Despite the improved volume, decliners still outnumbered advancers by 213-25, with 84 shares plunging to their floor prices.
Bank and securities shares were among the day's big losers, with Sacombank (STB) closing off 2 per cent, Vietinbank (CTG) down 2 per cent, and Eximbank (EIB) off 2.14 per cent, while HCM City Securities (HCM) declinedby 2.2 per cent and Saigon Securities Inc (SSI) 1.7 per cent.
SSI was the most-active share on the day, however, with almost 2.5 million changing hands.
On the Ha Noi Stock Exchange, the HNX-Index lost just over 3 per cent from Thursday's close to end Friday's session at 101.62. Market volume rose 45 per cent, however, to 37.7 million shares, worth over VND654 billion ($32.7 million).
Decliners outnumbered advancers by a whopping 279-27.
Seven codes saw activity in excess of a million shares each, including PetroVietnam Construction (PVX), with 4.87 million shares traded, and Kim Long Securities Co (KLS), with 3.38 million changing hands. PVX shares declined by 2.9 per cent on the day, while KLS slid by 4.1 per cent.
Analysts at ACB Securities Co said many investors increased selling shares when interest rates rose this week, fearing a long-term negative affect on business performance.
If the central bank's measures failed to stabilise the exchange rate, companies were also likely to suffer the combined negative effects of higher interest and exchange rates, they said.
However, although it admitted risks of inflation, exchange rate fluctuations, and the high trade deficit, a recent HSBC report on the Vietnamese stock market predicted that shares would not decline further from current level and would begin to recover at the beginning of next year, considering Viet Nam's high economic growth and market reforms, including an increase in foreign ownership limits.
Foreign investors yesterday were still net buyers on the HCM City market, picking up over 1.5 million shares worth VND77.2 billion ($3.9 million), but they were net sellers in Ha Noi, reponsible for sales of VND2.8 billion ($143,000) worth of shares.
Source: vnagency.com.vn
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