kude.punny

Stock market eclipses 900-point mark, headed beyond

Vietnam’s stock market index soared 3.32 percent to hit a new record Friday, with blue chip stocks enjoying healthy gains.

The VN-Index rocketed 98.20 points to exceed the 900-point threshold, closing at 914.79 with 46 gainers and 42 losers.

Market watchdogs forecast the 1,000-point mark would be well within reach this week if the trend continued.

Trading volume reported 8.2 million shares valued at VND1.03 trillion (US$64 million)

The top three performers were CII (Ho Chi Minh City-based Infrastructure Investment and Development Co), FPT (IT developer), and GMD (Gemadept), hit the ceiling by 5 percent.

FPT led the top winner list gaining VND25,000 to close VND525,000 per unit; the GMD runner up increasing VND9,000 to VND189,000; and CII made gains of VND3,000 to VND63,000.

Other stock market heavyweights like SAM (Cables And Telecom Materials Joint Stock Company) and PVD (PetroVietnam Drilling and Service Co) increased by between VND10,000 to VND11,000 to close at VND211,000 and VND233,000 respectively.

Foreign investors continued to pump VND392 billion ($24 million) into buying 3.2 million shares.

Market analysts attributed the bourse rise to optimistic forecasts on the market last week.

Capitalization is set to amount to $30-40 billion by 2010, accounting for between 30 and 40 percent of the country’s gross domestic product (GDP).

This year alone, market capitalization is projected at nearly 30 percent of GDP, currently $60 billion.

Safe stock collateral

At a recent conference, a State Bank of Vietnam (SBV) representative said loans against stock collateral accounted for just 2 percent of the country’s total outstanding loans, equivalent to VND1.5-1.6 trillion ($93.4 – 99.7 million), and that the credit system had not been adversely affected.

However the central bank also confirmed that lending for securities investment ran more risk than other lending forms since the market tended to be volatile.

Thus SBV has decreed a range of official documents to warn credit institutions to be more cautious.

Particularly, banks were not allowed to offer loans to their securities arms as it would expose the bank and banking industry to unnecessary risk.

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