Dong devaluation hits shares
Dong devaluation hits shares
The domestic stock markets were hit hard again this morning after the State Bank of Vietnam devalued the dong by another one per cent.
The devaluation raised investors' concern about the country's inflation, national debt and forex reserves.
The monetary authority weakened the reference rate, or the interbank exchange rate, from VND21,673 to VND21,890 per American dollar, while expanding the trading band from plus or minus two per cent to three per cent. With the new band, the dollar will now be traded between VND22,547 and VND21,233.
This is the third devaluation of the dong since early this year, and the second adjustment of the dong's trading band. The SBV had increased the trading band from one per cent to two per cent last Wednesday to counter China's surprise currency depreciation.
On the HCM Stock Exchange, the VN-Index lost more than 10 points, or 1.73 per cent, to close the morning at 570.18 points, while the VN30, which tracks the top 30 shares by market value and liquidity, was also down 1.58 per cent to end at 602.15 points.
Banks were leading the downward trend, as the shares of most lenders plunged.
Vietinbank (CTG) was the largest loser with a decrease of 2.5 per cent, while other banks fell between 1.4 and 2.8 per cent.
The overall market condition was negative, with half of the total 308 codes tumbling, while only one-third of this number posted gains.
More than 57 million shares, worth more than VND1.05 trillion (US$48.2 million), were traded by the end of the morning.
On the Ha Noi Stock Exchange, the HNX-Index also dived 0.93 per cent to end at 78.86 points, as the losers outnumbered the gainers by 105 to 32, while 227 remained unchanged.
Liquidity was as low as nearly 17 million shares, worth VND168.4 billion ($7.7 million).
The trading will resume at 1pm.
