Electricity price hike weighs on share prices
Electricity price hike weighs on share prices
Shares increased in HCM City and declined in Ha Noi over a week that was challenged by a number of economic activities.
On the HCM City Stock Exchange, the VN-Index gained 1.17 per cent over the previous Friday's close to 396.78 points. Trading value averaged roughly VND1 trillion (US$47.6 million), 96 per cent up on the previous week's level, as trading volumes averaged 70.4 million shares per session.
On the HaNoi Stock Exchange, the HNX-Index lost 0.72 per cent over the preceding week, standing at 54.05 points. However, trading improved. The average value of trades climbed 32 per cent to VND370 billion ($17.6 million), while trading volumes averaged 59.6 million – a 18.7 per cent increase.
Shares, particularly property stocks, posted gains in some trading sessions, boosted by Government promises to help the real estate sector.
Along with support in terms of taxes and property trading policies, State Bank of Viet Nam Governor Nguyen Van Binh said the bank would handle bad debts of VND100-150 trillion ($4.7-7.1 billion) in the real estate sector. In addition, it would give commercial banks VND20-40 trillion ($952 million-$1.9 billion) to make home purchase loans available over the next 10 years.
Significant
Meanwhile, stocks were pulled down on Thursday after the Viet Nam Electricity (EVN) announced to increase the cost of electricity by 5 per cent.
Senior economist Le Dang Doanh said that increasing the price from December 22 had not affected the year's consumer price index but could have a significant impact on commodity prices during the Tet (Lunar New Year) holiday.
EVN deputy general director Dinh Quang Tri had said calculating the effect of electricity price on production was the responsibility of enterprises rather than the EVN, thanhniennews.com reported. However, Doanh said this was irrational. Electricity was an important input in business.
"It is irrational that EVN ignores the pressure on companies when the price of electricity is increased."
Input costs in Viet Nam were relatively high compared to most countries in the region, Doanh said. "Lifting the price amid economic difficulties will only make producers weaker and increase inventories."
In its scheme to support enterprises during economic turmoil, the central bank cut operating interest rates by 1 per cent, effective today. Specifically, the refinancing rate was reduced to 9 per cent per year; the rediscount rate to 7 per cent; the overnight interest rates in inter-bank electronic payments to 10 per cent.
During the last trading day of the week, foreign investors bought shares on the HCM City exchange with a total net value of VND359 billion ($17 million).
They were also sellers for the whole week by a margin of VND390 billion ($18.5 million). The greatest transaction involved 2.1 million shares of food processor Masan Group (MSN).
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