Aug 14, 2008, 10:13 GMT
Hanoi - Vietnam will further widen the band within which stocks on the Ho Chi Minh City stock exchange are allowed to trade from 3 per cent to 5 per cent effective August 18, the State Securities Commission said Thursday on its website.
The move is based on 'current developments in the stock market and proposals from the Ho Chi Minh City Securities Trading Centre, the securities commission said.
The broader trading band comes in response to the stock market's recovery since late June.
The announcement of the wider band, accompanied by a 5 per cent cut in retail gasoline prices Thursday morning, spurred the VNIndex to a seventh straight day of gains.
Shares closed Thursday up more than 12 points, to 476.5.
The State Securities Commission also said that it will widen the trading band on the over-the-counter Hanoi Securities Trading Centre from 4 per cent to 7 per cent from August 18.
However, a market source said the move was premature, and that the market's growth is not yet sustainable.
'I don't think it is a good time to adjust the trading band, as the market is already doing well now,' said Nguyen Duy Hung, general director of Saigon Securities Company. 'There are no strong fundamentals for the market to keep growing.'
Vietnam's government reduced the trading band from 5 per cent to 1 per cent on March 27 to slow its precipitous decline since late last year. The market lost over 60 per cent of its value between January 1 and June 11, when it bottomed out at 370.
The trading was then raised to 2 per cent on April 7 and to 3 per cent on June 19 as the market began to recover.
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