By - Aug 30, 2010
Vietnam’s benchmark stock index, the world’s worst performer this quarter, rallied the most in almost eight months as investors speculated losses that drove the gauge into a so-called bear market were overdone.
The VN Index on the Ho Chi Minh City Stock Exchange jumped 3.6 percent to 444.55 at the 11 a.m. close, the biggest gain since Jan. 4 and the largest increase among Asian benchmark indexes today. Bao Viet Holdings, an insurer, led gains.
“The market has slumped too much and stock prices have become very attractive,” said Giang Trung Kien, head of research at FPT Securities Joint-Stock Co.
The stock gauge fell as much as 23 percent from its May 6 peak through Aug. 25, exceeding the 20 percent drop which analysts define as a bear market, as the third devaluation of the nation’s currency since November spurred concern the government would add to measures to plug the nation’s deficit. The gap reached $7.4 billion for the seven months through July, almost twice the year-earlier figure.
The VN Index is the worst performer since June 30 among 93 global benchmark measures tracked by Bloomberg, with a decline of 12 percent. Stocks on the index trade at 9.9 times reported earnings, down from this year’s high of 12.6 times in March.
Inflation slowed for a fifth month in August, which may ease concern that the devaluation of the dong will stoke price pressures. Consumer prices climbed 8.18 percent this month from a year ago, down from 8.19 percent in July.
A rally in Asian markets also boosted investor “sentiment,” Kien said.
The MSCI Asia Pacific Index rose as much as 1.6 percent today as the Bank of Japan expanded credit support for banks and the U.S. Federal Reserve pledged measures to spur economic growth.
Bao Viet jumped 4.8 percent to 48,100 dong, the biggest contributor to gains on the index. Vietnam Dairy Products Joint- Stock Co., the country’s second most valuable company, advanced 1.7 percent to 88,500 dong.
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