Investors respond negatively to higher petrol prices

Hanoi (VNA) – Investors responded negatively to higher petrol prices and
electricity rates announced on Feb. 22, sending share prices plunging
across-the-board on the HCM Stock Exchange.

The VN-Index lost 2.69 percent of its value to end the trading session at 496.29
points, while nearly 90 percent of codes lost value.

The overall value of trades rose slightly, however, to 1 trillion VND (52.6 million
USD), on a cummulative volume of 25.8 million shares.

On the Hanoi Stock Exchange on Feb. 23, the HNX-Index also dropped by 2.4
percent to close at 161.56 points. The value of the day’s trades reached 329.5
billion VND (17.3 million USD) on a volume of 10.4 million shares.

The announcement of higher fuel and electricity costs dovetailed with inflation
worries to make investors skittish. February CPI figures were announced on Feb. 23
to have climbed to 1.68 percent in HCM City and 2.16 percent in Hanoi .

But Au Viet Securities Co investment specialist Ta Thu Tin said investors seemed to
respond more negatively to the fuel price and electricity rate increases.

Inflation in February was no surprise and acceptable, as it was often above 2
percent every year during Tet, said Tin.
“But the fuel price increase worries investors about the possibility of high
inflation in March, when it is usually low,” Tin said.

The State Bank’s impending move, announced on Feb. 23, to allow commercial banks
to negotiate lending interest rates with enterprises could result in interest as
high as 16-17 percent per year, increasing credit costs to businesses, Tin added.

Foreign investors remained net buyers on both stock exchanges, buying a net of 77
billion VND (4 million USD) worth of shares.-Enditem