The Ho Chi Minh City stock market Wednesday dropped for
a third straight day after an early surge triggered by an official
interest rate cut petered out.
The VN-Index, a gauge of 167 firms and four closed-end
funds, began the day by climbing 0.45 points to 307.9 in the first
session. But it then turned in the second session and finished the day
at 306.22, 0.4 percent lower.


Investors remained cautious despite the latest good
news for the local economy. The central bank said it would slash the
key rate to 10 percent from 11 percent, effective from December 5,
while Prime Minister Nguyen Tan Dung asked the Ministry of Finance to
allocate US$1 billion to prevent an economic slowdown.


“The rate cut and the government's $1 billion stimulus
package are definitely good news for the economy, but it will take some
time for it to have any concrete effect on the economy and the market,“
Bloomberg quoted Pham Thanh Thai Linh, an analyst at Hanoi-based Bao
Viet Securities Joint-Stock Company, as saying.


“The rate cut will be good for borrowers, but the
question is whether companies are willing to borrow in this difficult
time when Vietnam's major export markets such as US and Japan are in an
economic recession, slowing demand.


“Regarding the $1 billion package, the government says
it will spend it on infrastructure projects. It means construction,
cement and steel companies will benefit from the package.


“However, I think it'd be better to wait for a couple
of months before buying shares of these companies because as I said, it
is premature to talk about a recovery in the market in short-term.”


Trading volume remained low, with 8.9 million shares
changing hands. Among the index members, 92 dropped, 47 gained and 32
were unchanged.


Foreign investors continued selling off shares,
shedding around 64 billion ($3.8 million) while picking up 45 billion
($2.7 million).


Can Tho Techno-Agricultural Supplying Joint-Stock
Company, one of Vietnam's biggest fertilizer importers, advanced
VND1,400, or 3.7 percent, to close at VND39,000. The company will pay a
dividend of VND2,000 per share on December 31, according to a statement
posted on the exchange’s website, after the market closed Tuesday.


Ben Tre Forestry and Aquaproduct Import Export Joint
Stock Company rose VND700, or 4.8 percent, to VND15,400 at the close.
The company registered a 1.5 million share buyback, according to the
website.