Soaring banking shares helped lift the VN-Index to 514.92 points yesterday, an increase of 4.12 per cent over Monday’s standing. All four banks listed on the HCM City Stock Exchange saw their shares hit the ceiling of their regulated daily trading bands, with Sacombank (STB) also racking up a volume of 5.4 million shares on the day, accounting for 13.76 per cent of total market volume of 40.7 million shares.

The entire value of the day’s trades, meanwhile, totalled VND1.9 trillion (US$102.7 million).
On the Ha Noi Stock Exchange yesterday, the HNX-Index also surged 4.23 per cent to 168.69. Trades totalled VND721.5 billion ($39 million) on a volume of 21 million shares, with Kim Long Securities (KLS) claiming the spot as the most-active share with 3.3 million traded.

"The overnight rally in US banking shares have eased worries that the Dubai situation would affect the global financial system," said Nguyen Ngoc Anh, a broker with a HCM City-based securities company.

Investors also began accepting the long-term positive impacts of the State Bank of Viet Nam’s recent policy moves, including raising the prime rate and adjusting the foreign exchange rate, Anh said.

Investors also might have started buying banking shares in order to participate in year-end dividends and bonus plans, Anh added, and some might have been encouraged by a comment by a State Securities Commission suggesting that the time for clearing shares might be shortened.

Under current rules, shares cannot be resold within four days of their acquisition, keeping investors from responding quickly to market changes.

Nguyen Son, head of the State Securities Commission’s market development department, had told that it was time to shorten this clearance period, saying that the possibility of quickly buying and selling a particular stock, as well as looser rules allowing investors to maintain more than one trading account, was included in a draft regulation the commission might issue in early 2010, if the Ministry of Finance were to concur.

"If margin trading is allowed, it will stimulate capital inflows into the securities market and solidify investor confidence," said Dinh Thi Phuong Dung from Bao Viet Securities Co.
Dung noted the recovery of the VN-Index this week but also pointed to low trading volumes as a sign of investors’ continuing caution.