Bank stocks help rally markets

HA NOI — Stock indices rose steadily yesterday after Tuesday's modest retreat with bank shares again performing strongly.

On the HCM City Stock Exchange, three out of four banking stocks to post gains hit their ceiling prices, as did four out of five on the Ha Noi exchange. Ha Noi Housing Bank (HBB), with 12.6 million shares changing hands, was again the most heavily-traded share nationwide.

The Government decision to extend the deadline for credit institutions to comply with higher charter capital requirements seems to have further lifted investor expectations of a long-term market rise, especially among banking shares.

Le Dat Chi, head of HCM City Economics University's corporate finance faculty, said that when small banks were not under pressure to raise capital, interest rates could stabilise, a good sign for the stock market.

"The extension decision relieved investor psychology which has long been repressed by fear that capital flows were being diverted to banks under pressure to increase capital and adding to the pressure of increasing share supplies," Chi said.

A large amount of money that had been prepared for this capital increase could also end up being temporarily invested in the stock market, he added.

Bao Viet Securities Co analyst Nguyen Duc Thi agreed that the extension would reduce difficulties for banks which may have had to borrow at any cost to meet the charter capital requirements – but he was also relatively surprised that the term had been extended up to one year instead of six months, as had been requested by the State Bank of Viet Nam.

On the HCM City Stock Exchange yesterday, the VN-Index closed up 0.78 per cent to 493.47 points. The value of trades decreased 33 per cent from the previous day's session, however, to VND2.2 trillion (US$109.4 million), on a volume of 95.6 million shares.

Decliners continued to outnumber advancers by 146-77, but gains in a number of leading shares helped offset losses, including insurer Bao Viet Holdings (BVH), Phu My Fertilisers (DPM), Masan Group (MSN) and real estate developer Vincom (VIC).

On the Ha Noi Stock Exchange, the HNX-Index closed at 120.60, a gain of 0.83 per cent. The value of trades reached VND1.55 trillion ($77.8 million), with nearly 79 million shares changing hands.

Foreign investors remained net buyers on the HCM City market yesterday by a net of almost VND48 billion ($2.4 million) but were net sellers in Ha Noi market of VND3.4 billion ($170,000) worth of shares.

Source: vnagency.com.vn