Wary of Gov't checks, VN banks fall
Wary of Gov't checks, VN banks fall
Vietnamese shares were mixed yesterday on the two local exchanges, while banks fell amid fears that the Government inspections next year on some financial institutions will destabilise the banking industry.
The benchmark VN Index on the HCM Stock Exchange inched down 0.7 per cent to close at 599.99 points while the HNX Index on the Ha Noi Stock Exchange inched up 0.4 per cent to end at 81.94 points.
The banking sector index lost 6.5 per cent after the Government Inspectorate announced that the agency would conduct inspections on some financial institutions, including Vietcombank, on how they had complied with the law in their operations.
That announcement raised some public concerns about the future of the biggest banks such as Vietcombank (VCB), the Bank for Investment and Development of Vietnam (BID) and Vietinbank (CTG) as they had the highest amount of non-performing loans among all banks in Viet Nam, which threatened stability of the sector.
By the end of September, the three biggest banks had VND23.8 trillion (US$1.06 trillion) in non-performing loans, equal to 56 per cent of the banking sector's total performing loans.
Following the announcement and public concerns, VCB inched down 0.6 per cent, BID fell 1.3 per cent and CTG dropped 1 per cent.
Other big stocks such as Vinamilk (VNM) and Masan Group (MSN) remained the ones that prevented the VN Index from making higher gains as investors continued to sell them strongly. VNM lost 3.1 per cent and MSN dropped 1.4 per cent at the end of the session.
On the positive side, the brokerage sector index gained 2.1 per cent as the biggest brokerage firms rose on expectations that the new policy issued by the Ministry of Finance last week would help increase their earnings.
Last week, the finance ministry issued a circular that reduced the terms of listing on the Unlisted Public Company Market (UPCOM) for public companies that are unlisted on the two local stock exchanges.
This circular is expected to increase the number of listed companies on the UPCOM and help brokerage companies generate more earnings in the brokerage business.
At the end of yesterday, the biggest brokerage firms such as Saigon Securities Incorporation (SSI) gained 1.7 per cent, HCM City Securities Corporation (HCM) jumped 2.4 per cent and VNDirect Securities Corporation (VND) surged 2.3 per cent.
The two local exchanges traded more than 232 million shares, worth VND3 trillion ($136.6 million), a slight increase of 4.3 per cent from last week's daily trading value.
