Shares advanced on the nation's stock exchanges yesterday as the central bank's final decision on Circular No.13 helped settle investor psychology.
The State Bank of Viet Nam's decision, issued late Monday, allows banks to lend 25 per cent of their non-term deposits and count State Treasury and loans from other credit institutions of terms of three months or longer as part of their reserves for lending.
The decision is expected to help ease the capital crunch that banks feared due to Circular No 13's stricter capital adequacy requirements, which will take effect on Friday as previously announced.
The central bank yesterday also decided to keep the prime interest rate at 8 per cent for an 11th consecutive month.
On the HCM City Stock Exchange, the VN-Index closed up 1.1 per cent to 455.13 points. Market value rose by 10 per cent over Monday's session to slightly over VND1 trillion (US$53.8 million) on a volume of almost 39 million shares. Advancers outnumbered decliners by 150-57, with Sacombank (STB) the most-active share with over 3 million changing hands. STB rose for a second day and closed up 1.2 per cent to VND17,000 ($0.87) per share.
Of the 10 leading shares by capitalisation, nine posted gains, with insurer Bao Viet Holdings (BVH) and property developer Vincom (VIC) rising to their ceiling price.
Ha Thanh Securities Co's head of analysis and investment, Tran Van Don, said the impacts of Circular No.13 had dissipated and the market was unlikely to react dramatically.
Many investors remained watchful, Don said, noting the modest increase in trading volume and value yesterday.
He predicted that rising inflation would cause banks difficulties in lowering interest rates, putting further pressure on the markets.
Duong Hong Ha, chief analyst of Tri Viet Securities Company, agreed the domestic stock market was unlikely to see any explosive development in light of rising inflation, high interest rates and a large volume of new shares to list by year's end.
On the Ha Noi Stock Exchange, the HNX-Index advanced yesterday by a modest 0.18 per cent to close at 130.17. Volume hit 34.6 million shares worth VND981.6 billion ($50.3 million) – an increase by 39.5 per cent in volume and nearly 60 per cent in value – while gainers outnumbered losers by 203-72.