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Low August inflation lifts VN-Index   2008-09-04 - Viet Nam News

Investor confidence, buoyed by good news last week, resulted in huge purchases yesterday, which pushed the VN-Index up 2.98 per cent.

Gold prices have fallen by VND200,000-300,000 ($12-18.2) per tael compared to last Friday's figures.

The VN-Index closed at 555.14 after gaining 16.04 points on the day. Trading volume reached 16.86 million shares for a total value of VND854.43 billion (US$51.78 million).

Positive news included a lower-than-expected August inflation rate of 1.56 per cent, a record $47.2 billion worth of eight-month foreign-direct investment, stable exchange rates and reduced interest rates for loans.

The HCM City Stock Exchange had 142 winners, most of which hit the ceiling, and seven losers. Binh Dinh Minerals was the biggest winner, increasing 4.95 per cent to reach VND127,000 ($7.7) per share.

Hoa Phat Group (HPG) was the most active with orders for 1.2 million shares. This was closely followed by Phu My Fertilisers (DPM) with 1.1 million.

Foreign investors were net sellers yesterday, unloading nearly 4.4 million shares and buying about 1.2 million. Net sales value reached VND309 billion ($18.7 million).

On the Ha Noi Securities Trading Centre, the HASTC- Index added 1.87 points, or 0.97 per cent, to end at 194.3. About 6.67 million shares changed hands for more than VND367 billion ($22.24 million).

PetroVietnam Insurance (PVI) was much in demand. Sales exceeded purchases by 2.2 million shares. Kim Long Securities (KLS) and Asia Commercial Bank (ACB) were also attractive, exceeding 2.1 million and 1 million units, respectively.

The "decision by the State Bank of Viet Nam (SBV) to keep the prime interest rate at 14 per cent and triple the interest rate of commercial bank reserves from 1.2 per cent to 3.6 per cent last Friday consolidated confidence.

"SBV's move has created more confidence among investors, especially for foreign investors, about [the Government's] determination to maintain a tight monetary policy to curb inflation - and will also bring considerable profits to commercial banks," a EuroCapital Securities report said.

"In mid-September, if the macro-level environment continues to improve, there are chances that the SBV will consider cutting the prime interest rate," according to SME Securities' analysis department.

Meanwhile, world oil prices tumbled yesterday to about $109 a barrel after it appeared that Hurricane Gustav struck only a glancing blow to the Gulf of Mexico's offshore energy infrastructure, AP reported.

FPT Securities analyst Nguyen Truong Son said late last week the market would bounce back strongly if oil prices continued downward.

Gold drops

Domestic gold prices continued to fall sharply yesterday following global market moves.

Gold at Saigon Jewellery Co (SJC) closed at VND17.11 million ($1,037) per tael yesterday in Hanoi and VND17.09 million ($1,035.75) in HCM City (1 tael is equivalent to 1.2 ounces).

The commodity closed at VND17.2 million ($1,042.42) per tael at Bao Tin Minh Chau Company.

Gold prices have fallen by VND200,000-300,000 ($12-18.2) per tael compared to last Friday's figures.

Experts, however, expect prices to bounce back shortly.

"Analysts say demand for gold is increasing again and this may maintain gold prices at high levels," a spokesperson for SJC said on Monday.

"There's little chance gold prices will go down again because of world political developments and the uncertainly of the crude oil market."

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