Shares down following bank official arrest (21/8)

[xiuchic]

Shares fell sharply during today's session as the market reacted negatively to news of the arrest of Nguyen Duc Kien, vice president and co-founder of Asian Commercial Bank (ACB), for unlawful financial activities. Kien is also a large shareholder in a number of other listed banks including Sacombank (STB) and Eximbank (EIB).

Nguyen Van Binh, governor of the State Bank of Viet Nam, revealed earlier that Kien had set up three companies that had employed illegal financial activities.

Binh soothed investors by saying that Kien did not hold a management position at ACB, and customers could be assured that their money was safe.

Leaders from other banks – including Sacombank, Eximbank – were also quick to stress that Kien's individual activities had not affected them.

However, their reassurances failed to prevent shares from plunging. ACB – listed on the Ha Noi Stock Exchange – and five other banks on the HCM City Stock Exchange all dropped to their floor prices.

Twenty-seven out of the 30 leading shares tracked by the VN30 Index in HCM City also bottomed out. The VN30 lost nearly 5 per cent to close at 496.39 points, and the benchmark VN-Index tumbled 4.7 per cent to finish at 416.84 points.

Profit-taking pushed trading value to over VND1.2 trillion (US$57 million) on a volume of 70 million shares.

On the northern bourse, the HNX-Index retreated 5.24 per cent to 66.95 points.
Around 51 million shares changed hands with overall market value of VND469.5 billion ($22.3 million).

Nearly 170 codes out of 250 decliners plunged to their floor prices, including blue chips, pushing the HNX30 down more than 6 per cent to close at 127 points

[xiuchic]

Shares fell heavily during yesterday's session as the market reacted negatively to news that Asian Commercial Bank co-founder Nguyen Duc Kien was arrested as police investigate his business activities.

Kien currently is one of the 20 richest people in Viet Nam based on stock reports.
State Bank of Viet Nam Governor Nguyen Van Binh addressed rumours of Kien's heavy involvement in Viet Nam's banking industry and said the State Bank had only received a police reprot relating to the arrest of Kien based on the fact he had established three companies which had operated illegally.

"Kien was vice chairman of ACB's founding member council which was set up by the bank itself," said Binh. "However, under the Law on Credit Organisations, joint stock banks are not permitted to have such councils. Currently, however, Kien is not a member of the board of management."

He said the State Bank has taken measures to support the liquidity of Asia Commercial Bank (ACB) and other credit organisations in case of run on the banks.
Leaders from other banks – including Sacombank (STB) and Eximbank (EIB) – also said Kien's individual moves did not affect their operations.
""This news still delivered a shock to the stock market, and investors are in a panic," said Kim Eng Securities Co analysts in a report.
Five bank shares listed on the HCM City Stock Exchange all plunged to their floor prices.
Twenty-seven out of the 30 leading shares tracked by the VN30 in HCM City also bottomed out. The VN30 lost nearly 5 per cent to close at 496.39 points. The VN-Index also tumbled 4.7 per cent to end the session at 416.84 points.

The heavy sales pushed tradeing value up 70 per cent to VND1.2 trillion ($57 million) on a volume of 70 million shares. Normally, increased trading value reflected an improvement, said Kim Eng analysts said. "In this case, however, sellers seem to be very aggressive."

On the northern bourse, the HNX-Index also retreated by 5.24 per cent to 66.95 points. Around 51 million shares changed hands, for an overall market value of VND469.5 billion ($22.3 million).
Nearly 170 codes over 250 decliners plunged to their floor prices, especially blue chips, pushing the HNX30 down more than 6 per cent to 127 points.

ACB, the most influential stock in the HNX30, had a sell surplus of nearly 1.9 million shares yesterday, although it immediately denied the adverse impacts of the bank billionaire's arrest.
The market suffered from a domino effect as mainstay bank stocks were sold heavily.

Yesterday morning, domestic gold prices rose to a three-month high of more than VND43 million ($2,061) per tael (one tael is equivalent to 1.2 ounces). The domestic price of one tael of gold is VND2 million ($96) higher than the world price.

Nguyen Cong Tuong, deputy head of Sai Gon Jewelry Co's business department, said he was unsure about the impact of Kien's arrest on gold prices yesterday but suggested rising global prices might be driving domestic demand