Credit policies trigger decline
Investors worries that they could not borrow more money from commercial banks
for securities investments offloaded their shares on November 26, darkening
market prospects and pushing the VN-Index under 500 points.
Investors worries that they could not borrow more money from commercial banks
for securities investments offloaded their shares on November 26, darkening
market prospects and pushing the VN-Index under 500 points.
The investor panic followed the State Bank’s raising of the prime interest rate to 8 percent. The index closed on Nov. 26’s session at 482.6 points, falling 4.13 percent.
Trading volume on the HCM City Exchange dropped by nearly half from Npv.25’s volume to only 38.2 million shares, for a total value of 1.71 trillion VND (95.5 million USD).
The HNX-Index continued sliding 5.87 percent to close at 155.19 points. Trading volume fell to 18.3 million shares and a turnover of 639.5 billion VND (35.5 million USD).
“The central bank’s decision on administration of the monetary system seems like it will have the greatest impact on securities trade,” said Nguyen Van Dung, an independent securities analyst.
Dung said investors were following a herd mentality in their response to the central bank’s recent tightening of credit lending and increase of the prime interest rate.
General Director of An Binh Securities Nguyen Hong Quan was quoted in online newspaper cafef.vn as saying that the central bank’s decision to raise the prime interest rate by a percentage point to 8 percent theoretically meant commercial banks will raise their mobilising rates.
As a consequence, investors came to the conclusion that capital sources injected into securities will be impacted, said Quan./.
The investor panic followed the State Bank’s raising of the prime interest rate to 8 percent. The index closed on Nov. 26’s session at 482.6 points, falling 4.13 percent.
Trading volume on the HCM City Exchange dropped by nearly half from Npv.25’s volume to only 38.2 million shares, for a total value of 1.71 trillion VND (95.5 million USD).
The HNX-Index continued sliding 5.87 percent to close at 155.19 points. Trading volume fell to 18.3 million shares and a turnover of 639.5 billion VND (35.5 million USD).
“The central bank’s decision on administration of the monetary system seems like it will have the greatest impact on securities trade,” said Nguyen Van Dung, an independent securities analyst.
Dung said investors were following a herd mentality in their response to the central bank’s recent tightening of credit lending and increase of the prime interest rate.
General Director of An Binh Securities Nguyen Hong Quan was quoted in online newspaper cafef.vn as saying that the central bank’s decision to raise the prime interest rate by a percentage point to 8 percent theoretically meant commercial banks will raise their mobilising rates.
As a consequence, investors came to the conclusion that capital sources injected into securities will be impacted, said Quan./.
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