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Strong last minute purchases helped the VN-Index on the HCM City Stock Exchange rally for the second day, closing the session at 445.21 points after rising 0.04 per cent.
About 27.5 million shares changed hands, worth a total of VND662.9 billion (US$34 million).
Blue chips rebounded during the session's third phase, including Bao Viet Holding (BVH) and Hoang Anh Gia Lai (HAG), up 1 per cent each; Hoa Phat Group (HPG) and PetroVietnam Finance (PVF), 0.5 per cent; and VietinBank (CTG), 0.1 per cent.
About nine of the 268 listed stocks on the HCM City market matched their ceiling prices, including Industrial Urban Development Co No 2 (D2D), up 2.1 per cent; Ninh Hoa Sugar (NHS), 1.7 per cent; National Seed (NSC), 1.6 per cent; and Hoang Quan Resulting-Trading-Service Real Estate (HQC), 1.5 per cent.
In Ha Noi, the HNX-Index fell by 1.09 per cent to close at 111.32 points, on a total volume of 20.8 million shares.
Value remained low at VND411.9 billion ($21.1 million).
The decliners outnumbered advancers by 213 to 72, while 25 stocks matched their ceiling prices.
Banks cut deposit interest rates but boost promotions
Deposit interest rates at Vietcombank, Vietin-bank, Techcombank, Eximbank, Asia Commer-cial Bank, Viet Nam Tin Nghia, Sacombank and Ocean Bank range from 10.85-11 per cent.
Banks have begun offering gifts, including Vespas, Honda Civics, Toyota Camries or cash, to attract customers.
"The Government instructs, the State Bank of Viet Nam (SBV) directs and the Viet Nam Banks Association pushes us to cut interest rates. But if it is difficult for us to absorb deposits, then we have to use additional measures," said a deputy director of a HCM City-based bank, who asked to remain anonymous. "The previous higher interest rates could hardly be called deposits. I don't understand how markets will respond to these new lower interest rates."
A senior manager at the Bank for Investment and Development of Viet Nam said, "Cutting deposit interest rates at this moment is not easy for many banks because customers expect high interest rates to combat inflation."
VNBA General Secretary Duong Thu Huong said that banks were trying hard to lower interest at banks, but interest rates depended on what the Government did to fight inflation.
The SBV reported that deposit interest rates at commercial banks from July to September were down 0.2-0.3 percentage points against the second quarter, ranging from 10.59-11.2.
The central bank will continue managing monetary flexibly, promoting open market operations and will work to refinance and keep interest rates stable to help banks lower interest rates.
Brokers to offer portfolio management
The amended Securities Law, if approved by the National Assembly, will likely create the legal ability for securities companies to offer portfolio management services, a long-time goal of fund management companies.
A draft of the amended law was approved by the Government and will be submitted to the National Assembly for approval during its ongoing session.
The draft proposal does not stipulate that portfolio management services are an exclusive right of fund management companies, meaning other entities, including securities companies, would be able to offer the service to investors.
"This is reasonable. Securities companies are providing investment advisory sevices and many investors ask securities firms to help them manage their investment portfolios," said Huynh Huu Dat, an officier of Au Viet Securities Co's Legal Department.
Additionally, global and Vietnamese mutual funds tended to shift from close-end to open-end in order to facilitate diversified asset management, Dat added.
"Now, securities companies will be more flexible than fund management companies in managing investment portfolios for the majority of individual investors in Viet Nam," he said.
Dat noted, however, that even if the draft was approved, this would happen only once the Ministry of Finance issued an implementation guidance document.
The draft law also entitles the Ministry of Finance to specify the financial services securities companies can provide, as well as regulate financial safety indicators which, according to many analysts, can affect the business performance of brokerage firms.
The amended law adds one new article, makes changes and additions to 16, and annuls one out of the 136 articles of existing law.
It focuses on regulations for public and private offerings, public purchase offers, corporate management, the business of securities companies, fund management companies, among others.
Despite these changes, the amended law has not set rules to regulate margin trading activities, for which the Ministry of Finance had drafted an implementation circular on these activities.
International auto expo opens in City
Domestic auto assemblers and parts suppliers are showcasing their latest products at the 7th International Automobile and Supporting Industries Exhibition, or AutoExpo Saigon 2010, which opened yesterday in HCM City.
On show at the four-day event are a wide range of vehicles including cars, special purpose vehicles, and technologies and accessories for the auto ancillary industry.
The exhibition, held for the first time in the city, is on at the Tan Binh Exhibition and Convention Centre in Tan Binh District.
It is organised annually by the Institute for Industry Policy and Strategy, the Viet Nam Society of Automotive Engineers, and CIS Vietnam Advertising and Exhibition Joint-Stock Company.
Work starts on new urban area in Ha Noi
The Ha Noi People's Committee granted a licence to build a new urban area in Hai Ba Trung and Hoang Mai districts.
The project includes high-end apartments, restaurants, a trade centre, an entertainment area, offices for lease and an education area.
It has a total investment capital of VND5.7 trillion (US$291.3 million), and will cover an area of 36.4ha. It is slated to break ground late this year and be put into operation in 2014.
Glass-tile factory opens in Vinh Phuc
An Thinh Service and Trading Company will hold an opening ceremony of its crystal glass tile factory tomorrow in the northern province of Vinh Phuc.
The factory has a total investment capital of VND167 billion (US$8.6 million), occupying an area of 3ha. It will be capable of producing 1.5 million square metres of crystal glass once in operation.
The factory is expected to gain a revenue of VND500 billion ($25.6 million) per year.
Maritime Bank targets small businesses
Viet Nam Marinetime Joint Stock Bank (Maritime Bank) has co-ordinated with the Institute of Economic Research to hold a conference regarding "preferential financing solutions for small and medium enterprises (SMEs) in quarter four".
Maritime Bank provides advisory as well as other services to SMEs.
There are 500,000 enterprises in Viet Nam, of which SMEs account for 97 per cent. SMEs contribute 30 per cent of the GDP.
State Bank moves to cool demand for US dollars
The State Bank of Viet Nam plans to inject addtional US dollars into the commercial banking system to meet the growing hunger of importers for the greenback in the closing months of the year, when consumer demand for imported goods traditionally rises.
The State Bank was unable yesterday to disclose the exact date or volume of the planned dollar infusion. However, a bank source that asked to remain anonymous said that commercial banks would be required to demonstrate a real demand for dollars by enterprises.
The World Bank on Tuesday said that an unusually large amount of money held outside of Viet Nam's official foreign exchange reserves was continuing to pressure the value of the Vietnamese dong even as most other regional currencies strengthened.
Viet Nam has devalued the dong by over 11 per cent since last November in a move intended to help control the ballooning trade deficit. But other regional currencies, according to the World Bank's latest East Asia and Pacific Economic Update, were actually 10-15 per cent stronger against the dollar than before the 2008 global financial crisis.
World Bank economist Deepak Mishra assumed that Viet Nam had enough dollar inflows to cover current accounts, but the real issue was the amount of foreign currency held in forms not under the control of the State Bank of Viet Nam, such as savings.
He estimated that this could be as high as 12 per cent of gross domestic product (GDP), putting intense pressures on the exchange rate and making the dong seem overvalued.
Consistent with this position, the State Bank this week has denied any further plans to devalue the local currency.
Nevertheless, the dollar continued to become more expensive on the black market yesterday, inching up another VND200 from Tuesday's level to an average of VND20,220 per dollar. By the afternoon, however, this had eased back to VND20,170 per dollar.
"Because the dollar is dancing, we don't dare hold too many dollars, in order to avoid exchange rate risks," said a forex retailer on Ha Noi's Ha Trung Street. "When customers want to buy, we will call major FX dealers to take the dollar."
On the interbank market, one dollar continued to be traded at VND19,970-19,980, although the official rate set by the central bank remained at VND18,932 per dollar. Commercial banks, meanwhile, were quoting nominal sell prices of VND19,500.
On the non-deliverable forward (NDF) market – a currency futures market – the US dollar yesterday was expected to keep rising, hitting over VND19,990 by next month, VND20,320 in three months, nearly VND20,790 in six months, and VND21,560 by October of next year.
Source: VNS
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