Agents put trading orders on the computer at An Binh Securities Company (Photo: VNA)
 

Hanoi (VNA) - Shares advanced on May 22 on strong support from the banking sector, following a new National Assembly resolution to resolve bad debt.

The benchmark VN-Index on the HCM Stock Exchange edged up 1.40 percent to close at 744.10 points.

On the smaller Hanoi Stock Exchange, the HNX-Index increased 0.58 percent to end at 92.71 points.

Bank stocks were the biggest gainer on May 22, as eight of nine listed lenders advanced and one remained unchanged. The sector index recorded an average daily growth of 3.64 percent, vietstock.vn data showed.

BIDV (BID) hit the maximum rise of 7 percent capped for a single trade on the HCM City’s bourse.

Other big banks including Vietcombank (VCB), Vietinbank (CTG) and Military Bank (MBB) increased 2-5 percent.

Two banks on the northern Hanoi’s exchange, Asia Commercial Bank (ACB) and Saigon-Hanoi Bank (SHB), leapt 1.6 percent and 2.9 percent, respectively.

The entire banking system settled over 610 trillion VND (roughly 27 billion USD) worth of non-performing loans (NPLs) in the 2012-16 period. Of the total, over 56 percent were recovered by credit institutions, and the remaining were sold to the Vietnam Asset Management Company (VAMC), a Government report released at the National Assembly’s meeting on Monday showed.

According to the report, the ratio of bad debts on balance sheet and unsolved bad debts sold to VAMC accounted for 5.8 per cent of total outstanding debts and investment of the banking system in the economy. This ratio would be over 10 percent with hidden debts included.

The Government has submitted a new resolution on NPLs to the National Assembly for approval, including having domestic and foreign investors involving in this process. This resolution is expected to help remove bottlenecks in solving bad debts.

“Stock market movement today reflected high investor expectations about this issue, as bank stocks surged and led the market,” Tran Hai Yen, a stock analyst at Bao Viet Securities Co, wrote on a May 22 report.

If approved by the National Assembly in this meeting session, the bad debt settlement resolution would be enacted shortly and helped speed up the bad debt solving process, Yen said.

The market was bustling on May 22, with a total of nearly 6.9 trillion VND (304 million USD) flowing in the two exchanges while nearly 366 million shares were changed hands, over two-fold increases over the daily average volume and value seen last week.

Foreign investors lifted their trades with a combined net buy value of nearly 480 billion VND in the two markets following the information US-based MSCI Frontier Markets 100 Index raised the proportion of Vietnamese shares in the basket from 8.01 percent to 12.63 percent. It is expected this exchange-traded fund will pour about 27.8 million USD in the Vietnamese market in the coming months.-VNA