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Dec 5 - Vn index broke the 300 point level today, sunk at 299.68. This is the third time the index sets new bottom line since Oct 28 at 322.80 and Nov 27 at 303.54.

"The situation is relatively complicated. The macro economic conditions are not so good at this time. Foreign factors strongly influence the local market", replied an official from SSC-State Securities Commission of Vietnam, when being asked for the reasons that supportive news like gasoline price cut off; lower prime rate given by SBV and the delay of income tax for stock investors have not positively push up the market.


"Support policies has a certain delay to be effective with the marke", said the SSC senior expert. Pic: Workers installing underground electricity cable in a village of Hanoi.

The senior official from SSC also stressed that the psychology factor also shadow local investors acts. "You know that Vietnamese investors now are closely watching capital market in the UK, Hong Kong, US and Japan. And, they are really putting under the move of those markets".

"Business in quarter 3 is better than in quarter 2 in term of CPI, banks' liquidation, interest rate, foreign exchange rate but there still difficulties ahead for the last month of the year and some earlier months of 2009", he stated.

Answering question how to push up demands from investor, he said: "local investors adjust themselves very well with the market information. Taking an example year a go when the property market was in fever, they crowd all transaction floors, hunting for stock in this field without encouragement from SSC".

The senior official from State Securities Commission of Vietnam denied the proposing support level of Vn Index at 292 points establishing by some independent analysts, explaining that: "if we recognised that level, it means we would have agreed that the index to decrease more"./.

Sate Bank of Viet Nam announces today Nov 3 the new basic interest rate is 12% per year, applied from Nov 5, 2008. Consequently, the loan interest rate is limited to 18% per annum at maximum.

This is the second time the basic interest rate is lowered within one month. The last decision was on Oct 20, 2008. Apart from decision no 2559/QD-NHNN dated today regarding basic interest rate & loans interest rate cutting down, serial of other decisions has been made today with applicable terms on Nov 5.

- Decision # 2561/QD-NHNN Dated Nov 03 for interest rates of refinancing decreasing from 14% to 13% per year, discount rate decreases from 12% to 11% per year; overnight rate in inter-banks electronics payment, and loans for balancing account from SBV to other banks from 14% to 13% per year.


"...producer and exporter need a good loan to survive, not to die, the more loan interest rate cut, the better enterprises would contribute to the market in general and to the stock market in particular...", said a Market researcher. A seafood farm in Bai Tu Long Bay, 20 miles north of Ha Long bay

- Decision # 2560/QD-NHNN dated Nov 03 for decreasing the compulsory reserves rate for VND by 1% and for foreign currencies by 2%, details as follow:

VND
+ For VND: applied for State commercial banks (excluding Bank for Agriculture & Rural development - Agribank); Vietcombank; Commercial Joint Stock banks in Urban area, Joint venture banks, Foreign banks branches; Financial companies, decreased from 11% to 10% for deposit of non - term and fixed term under 12 months; decreased from 5% to 4% for deposit with term of 12 months upward.

+ For Bank for Agriculture & Rural development - Agribank, VND compulsory reserves decreases from 8% to 7% applied for non term and 12 months downward term deposit; decreases from 4% to 3% for deposit with term of 12 months upward.

+ For Commercial Joint stocks banks in rural area; for Peoples Centre Financial Trust Fund; corporate banks VND compulsory reserves rate decreases from 4% to 3% for non term deposit & under 12 months deposit as well as over 12 months term deposit.

Foreign Currencies
+ applied for State commercial banks (excluding Bank for Agriculture & Rural development - Agribank); Vietcombank; Commercial Joint Stock banks in Urban area, Joint venture banks, Foreign banks branches; Financial companies, decreased from 11% to 9 % for deposit of non - term and fixed term under 12 months; decreased from 5% to 3% for deposit with term of 12 months upward.

+ For Bank for Agriculture & Rural development - Agribank, For Commercial Joint stocks banks in rural area; for Peoples Centre Financial Trust Fund; corporate banks, foreign currencies compulsory reserves decreases from 10% to 8% applied for non term and 12 months downward term deposit; decreases from 4% to 2% for deposit with term of 12 months upward.

As the SBV announcement comes out to State commercial banks, Vietcombank, they reported back to cut down the loan interest rate from 1% to 1.5% applied for VND. Agribank applied new rate for loan at 15-16% per year, special rate for rural house hold at 15.5% per year, SMEs at 15.9% per year.

BIDV, bank for investment & development of Vietnam, applied new rate from 15% to 16% per year for loan in VND, depends on client profiles (export enterprises, SMEs, import enterprise...)./.