VNStockNews.com - Vietnam’s stocks fell, dragging the benchmark index down the most in Asia, after the government signaled it may not meet its inflation target for the year.
The benchmark VN Index slid 1.7 percent to a one-month low of 425.29 on the Ho Chi Minh City Stock Exchange at the 11 a.m. local-time close.
The government estimates year-end inflation at 15 percent to 17 percent, a posting on its website said yesterday, after raising the target to 15 percent from 11.75 percent on June 3. Vietnam’s inflation rate is “intolerable,” the World Bank said last month in a report that called for the continuation of tough monetary policy measures until the figure is sustainably less than 10 percent.
“With a higher inflation target, deposit rates may be pushed up to 17 percent to ensure positive real interest rates,” Dao Nho Tam, deputy head of the research and analysis department at Hanoi-based Alpha Securities Joint-Stock Co., said by phone. “That in turn may boost lending rates, causing more difficulties to businesses.”
FPT Corp. (FPT), the country’s biggest publicly traded telecommunications and software company, lost 2.9 percent to 46,600 dong, the biggest decline since May 25. Vincom Joint- Stock Co., Vietnam’s biggest listed property company, dropped 2.9 percent to 133,000 dong.
The VN Index tumbled to a two-year low on May 25 after the central bank raised rates every month this year through May to combat inflation. Consumer prices climbed 20.82 percent in June from a year earlier, the fastest pace since November 2008. (Bloomberg)
