Shares slump, gold price soars

Shares retreated yesterday on both national exchanges, with decliners overwhelming advancers amid growing uncertainty over both the global and domestic economies.

The domestic gold price escalated yesterday and hit a new all-time high of VND44.3 million (US$2,150) per tael, while global equities markets responded negatively to ratings agency Standard & Poor’s unprecedented downgrade of the US sovereign credit rating from AAA to AA+.

Gold also hit a new global record of over $1,700 per ounce. (One tael is equivalent to 1.2 ounces.)

A super-heated local gold market yesterday overshadowed the National Assembly’s passage late last week of tax breaks for securities investors.

“Investors seeking safe investment haven in gold will affect capital flows into the securities and real estate markets,” said Phan Dung Khanh, head of analysis for Kim Eng Securities Co. “Soaring gold prices suggest the economy is still in difficult times and the stock market is unlikely to improve in the short term.”

On the HCM City Stock Exchange yesterday, the VN-Index closed at 396.41 points, a decline of 1.12 per cent from last Friday’s session. The value of trades remained meagre at VND462.7 billion ($22.5 million), with 24.7 million shares changing hands.

Mid-cap and small-cap shares were the biggest losers, losing 2.29 per cent and 1.26 per cent on average, respectively, while blue chips declined by just 0.68 per cent, according to figures from the financial website vietstock.vn. Sales during yesterday’s session came mostly from small investors who aimed to convert shares into cash to buy gold, Vietstock analysts said.

On the Ha Noi Stock Exchange, the HNX-Index fell by 1.8 per cent to end the day at 67.32 points. The value of trades totalled just VND228.7 billion ($11.1 million), a decline of over 33 per cent from Friday’s value, with only 23.4 million shares traded.

Foreign investors concluded yesterday as net sellers on both exchanges, unloading a combined VND52 billion ($2.5 million) worth of shares. — VNS

Tags: vietnam gold, Vietnam gold market, Vietnam gold prices