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Market retreats on WB’s Sacombank sell-off plan, global falls   2008-12-17 - Reuters, Bloomberg

Ho Chi Minh City stocks Tuesday gave up Monday’s gains as investors reacted anxiously to a global market slump and news that the International Finance Corporation is set to sell half its stake Sacombank.



The VN-Index fell below the 300- point mark again, as it lost 11.86 points, or 3.85 percent, to close at 296.42.

Managing director of the Hanoi-based VNDirect Securities Co., Le Chi Phuc, said investor confidence was hit by the IFC’s plan to sell shares in Sacombank, one of the country’s top banks.

"Sentiment was clearly hurt" by the IFC announcement, Phuc said, adding that the sale would lead to a sharp increase in market supply.

The IFC, the private sector arm of the World Bank, said on Monday it intends to sell more than 16 million shares in the country's sixth-largest lender without assigning any reason.

The IFC will start selling on the market today.

“There has been an overreaction among Vietnamese investors to the global financial situation. Actually, the underlying domestic economy has not been as bad as investors perceive,” said Huy Nam, a Ho Chi Minh City-based independent equity analyst and consultant on share sales for companies, including Cable & Telecommunications Material Joint Stock Co.

“Though it is obvious that our economy has been affected by the global turmoil, the impact has been less than on many other countries, because we have a different economic structure and integration with the global economy is not that deep.

“In the short-term, the Vietnamese stock market will show no signs of a strong rebound.”

Sacombank shares dropped 4.52 percent to close at VND19,000 even though the bank last week won regulatory approval to buy back up to 2.5 million shares daily.

Traders said a huge number of Sacombank shares flowed into the market Tuesday, leaving more than a million unmatched at the end of the session.

Word stocks in red

Tokyo closed 1.12 percent down and Sydney lost 1 percent.

Regional markets had opened lower, tracking Wall Street, as a tumble in Japanese business confidence and new signs of a China slowdown underlined worries in the region.

Those concerns deepened on news that HSBC, Europe's biggest bank, and other major lenders faced heavy exposure to the alleged US$50 billion pyramid scheme said to have been run by one of the biggest names in US investing.

European shares dropped Tuesday on the news, with the CAC 40 in France off 0.87 percent and the Dax in Frankfurt down 0.18 percent. London's FTSE 100 edged down 0.07 percent.

The Dow Jones Industrial Average lost 0.75 percent while the Nasdaq tumbled 2.1 percent.

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