Shares extend rally on credit growth limit relaxation

Friday, Jul 12, 2019 07:13

Transactions at Vietcombank's Vinh Yen branch. Shares of Vietcombank surpassed its 2008 peak to close at VND74,000 (US$3.18) per share on Thursday. — VNA/VNS Photo Tran Viet

Shares extended their gains on the nation's two exchanges on Thursday, with the banking sector leading the market following the news that the central bank would relax credit growth limits for some banks this year.

The VN-Index on the Ho Chi Minh Stock Exchange rose for a third day, closing up 0.51 per cent at 978.63 points. It gained 1.3 per cent over the last three sessions.

On the Ha Noi Stock Exchange, the HNX-Index was up 0.83 per cent to end at 106.01 points, lifting its three-day rally to 2.1 per cent.

A total of 189 million shares worth VND3.74 trillion (US$160.4 million) were traded on the two exchanges, up 3 per cent in volume but down 13.4 per cent in value compared to Wednesday’s figures.

Investors eyed banking stocks with 11 of 13 listed lenders on the two exchanges advancing and only two declining. The banking sector rose 2.2 per cent on Thursday, making it the biggest gainer among 25 stock groups tracked by financial website

Local media reported that many banks said they got the nod from the State Bank of Viet Nam (SBV) to raise their credit growth targets this year. They included Vietnam Prosperity Bank (VPB), which will see its credit growth ceiling raised from 12 per cent to 16 per cent. Techcombank (TCB), Military Bank (MBB) and Asia Commercial Bank (ACB) can raise their limits from 13 per cent to 17 per cent.

A Sacombank representative also said the bank was also allowed to increase its lending growth target but declined to specify the number.

Prices of these banks’ shares responded positively to the news. Shares of VPB, TCB, ACB and MBB rose by between 1 per cent and 2 per cent. STB inched up 0.4 per cent.

Other banks also gained. Shares of Vietcombank (VCB) surpassed its 2008 peak to close at VND74,000 ($3.18) per share, up 2.1 per cent in its fourth gaining session this week. Vietinbank (CTG) gained 2.6 per cent and Bank for Investment and Development of Vietnam (BID) gained 3.2 per cent.

Foreign investors were net buyers in the two markets for total net value of nearly VND138 billion ($6 million). Shares of Vietcombank and Vietinbank were also among the top five most heavily traded stocks by foreigners with net buy values of VND31.2 billion and VND19.4 billion, respectively.

According to analysts at BIDV Securities Co, the Fed’s signal it would cut interest rates in the future had a positive effect on markets worldwide, including the Vietnamese market. The VN-Index could hit the resistance level of 980 points in the next session. — VNS

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