Vietnam’s benchmark stock index gained the most in more than five months after the government eased trading rules and said it will close about 20 gold exchanges, boosting demand for equities.
The VN Index advanced 4.5 percent, the most since July 24, to close at 517.05 on the Ho Chi Minh City Stock Exchange, the highest in more than a month. Vietnam Export-Import Commercial Joint-Stock Bank, the country’s fourth-biggest listed bank, gained by the daily limit of 5 percent to 25,200 dong. PetroVietnam Fertilizer & Chemical Joint-Stock Co. climbed 5 percent, the most since Aug. 25, to 35,700 dong.
State Securities Commission Chairman Vu Bang Dec. 30 said the minimum period that buyers must hold shares before selling them may be reduced by one day. The government on the same day ordered the closure of about 20 gold trading floors in the country by March 30.
“A relatively big capital flow is expected to transfer from gold exchanges to the stock market,” said Giang Trung Kien, head of research at FPT Securities Inc., the brokerage unit of Vietnam’s biggest listed software maker. “Investors were trading very excitingly today because they expect the liquidity in the market will rise after the new rules.”
Investors currently have to wait three days after the date of purchase for the transaction to clear before they’re able to sell the shares. The delay will be cut to two days after the date of purchase, Bang said in an interview in Hanoi.
Agribank Securities Joint-Stock Co., the brokerage unit of Vietnam’s biggest lender by assets, rose 5 percent to 25,200 dong. Joint-Stock Bank for Foreign Trade of Vietnam, the country’s largest listed lender, added 4.9 percent to 49,300 dong, the highest since Nov. 16.
First Day
Shares surged in the first trading session of 2010 after a strengthening economy helped boost the index 57 percent last year, the most since 2006. The Southeast Asian nation’s economy expanded 5.3 percent last year and the government expects growth of 6.5 percent this year.
“We hold positive forecasts if you incorporate the growth rate of Vietnam and the general view of Vietnam and other emerging countries,” said Louis Nguyen, chairman and chief executive officer of Saigon Asset Management, which manages about $125 million.
“The forward price-earnings ratio appears to be reasonable,” he said by phone today. The “true” ratio for shares on the VN Index is 15 times earnings or less, he said. That compares with a multiple of 22.5 times estimated earnings for shares on the MSCI Asia Pacific Index.