VietNamNet Bridge - The VN-Index ended last week at 409.20 points, a decrease of 1.34 per cent from the previous week's close and 3.9 per cent since the beginning of the month.
"If the VN-Index falls below 410 points, it is highly probable that it will plummet to 400 this week," said FPT Securities Co analyst Nguyen Van Quy.

The average daily volume of trades on the HCM City Stock Exchange last week dropped by 27.4 per cent from the prior week to just VND347.4 billion (US$16.8 million), on an average daily volume of only 18.9 million shares.

The average daily value of trades on the Ha Noi Stock Exchange also fell by 1.2 per cent to VND204.8 billion ($9.9 million), while volume inched up 0.7 per cent to 19.4 million shares.

The HNX-Index fell by 0.9 per cent overall during the week to conclude Friday's session at 70.88 points.

Gains on both exchanges last Wednesday failed to give the indices a boost during the subsequent two trading days. Cash continued to flow away from stocks, and investors were willing to sell at deflated prices.

But, while blue chips lost an average of 1.86 per cent during the week, mid-cap shares managed a average gain of 0.2 per cent, according to the website vietstock.vn.

The only positive economic information last week was that the State Bank of Viet Nam had bought in $4 billion since the beginning of the year – or an additional $1 billion in just the last month alone, since the comparable figure for the year so far, back on June 22, was just $3 billion.

After two months during which inflation seemed to be in remission, the inflation rate in July accelerated in the nation's two largest cities.

"This was predictable, however, as food prices had risen sharply," Quy said.

In addition, the Ha Noi Stock Exchange announced the results of its Government bond auction last Thursday, with only 31.3 per cent of the total VND4 trillion ($194.2 million) issue finding buyers. State borrowing costs also rose, with yields on the three-year and five-year bonds hitting their highest level in six weeks.

Bonds issued by the Social Policy Bank on Friday, with a guarantee from the Government, went begging, despite yields of 12.84 per cent or higher.

"Concerns about inflation and interest remain and are causing sluggish trading on the stock market," Quy said.

"Investors are looking to the direction of monetary policies to be set by the 13th National Assembly, including their responses to such critical issues as inflation, the trade deficit and interest rates," wrote analysts of Au Viet Securities Co.

The Government was expected to continue tight monetary policies, while aiming to reduce interest rates and control the bad debt levels of financial institutions, the Prime Minister said at the National Assembly's opening session late last week.

Source: VNS