Vietnam shares were sharply lower Wednesday due to selling by local investors, who were spooked by concerns that banks will continue to reduce lending through the year-end even as demand for cash rises because holidays are fast approaching, traders said.
The benchmark VNIndex was down 3.6%, or 16.81 points, at 442.63, in thin volume of 19 million shares worth VND700 billion. The index has fallen 11.8% so far this month.
"Local sentiment often reacts slowly with the news, and the statement of Central Bank Governor Nguyen Van Giau yesterday about tightening bank loans was the key reason pushing down the prices today," said a trader with Saigon Securities.
The Vietnamese central bank will limit credit growth to curb inflationary pressures, Governor Nguyen Van Giau told state-run Vietnam News Agency Tuesday.
Traders expect the index to have immediate support at 440 today.
"As demand for cash is strong these days, many businesses can't borrow from banks and their only option is to cash out from stocks," said the trader, who declined to be named.
Petrosetco was a leading decliner, down 4.5% at VND18,900, while REE fell 4.6% to VND37,400, and Vincom fell 5.0% to VND96,000.
Source: Dow Jones