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Inflation fears depress shares   2011-01-06 - VNS

Shares plunged yesterday on both of the nation's stock exchanges, with worries over rampant inflation plaguing the markets.

On the HCM City Stock Exchange, the VN-Index declined by 0.84 per cent to close at 481.91.

The value of trades rose 34 per cent over the previous day but remained meagre at just VND1 trillion (US$47.6 million). Volume increased by 37 per cent to 40.6 million shares.

A few blue chips posted gains, including Kinh Bac City Development (KBC), which rose 2.1 per cent; Bao Viet Holdings (BVH), up 1.5 per cent; and PetroVietnam Finance (PVF), up 0.8 per cent.

Saigon Securities Inc (SSI) was the most-active share in HCM City, with 2.4 million traded, but lost 2.8 per cent of its value to close at VND31,300 ($1.50) per share.

Cautious sentiment of investors continued to dominate the market, said Bao Viet Securities Co analyst Nguyen Duc Thi, who believed that the greatest risk this month remained soaring inflation in the run-up to Tet (Lunar New Year). He predicted market fluctuations throughout the month.

"The VN-Index is expected to break out of its rut once the consumer price index (CPI) shows signs of slowing down," Thi said.

Analysts with Viet Star Securities Co agreed buyers were cautious about high inflation, while potential sellers were holding onto shares in light of positive economic forecasts predicting solid growth in the coming months.

"The market has left a difficult year behind and current prices already reflect most of the economic issues," they said.

On the Ha Noi Stock Exchange, the HNX-Index lost nearly 2 per cent to end yesterday's session at 111.16 points. The volume of trades rose by 24 per cent over the previous day to 28.6 million shares, but value remained a modest VND550.3 billion ($26.2 million).

Advancers outnumbered decliners by 234-56, with none of the 10 leading shares by capitalisation posting gains.

Ha Noi Housing Bank (HBB) became the most-active stock nationwide with 2.9 million traded. HBB declined by 3.5 per cent, however, to close at VND11,200 ($0.55) per share.

Ben Thanh Services Co (BSC) and Seagull Shipping Co (SSG) both debuted on the northern bourse yesterday, and both closed their first trading day higher. BSC closed at VND11,000 ($0.52) on a volume of 8,000 shares exchanged and SSG at VND15,000 ($0.71) on a volume of 15,000 shares.

Foreign investors continued as net buyers on both exchanges yesterday, picking up a net total of almost 2 million shares worth over VND73 billion ($3.5 million).

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