Vietnam’s stocks gained the most in three weeks after a government decision to keep petroleum product prices unchanged eased inflation concerns.
The VN Index advanced 1.9 percent to 474.56 at the close in Ho Chi Minh City, the biggest gain since Feb. 6. The gauge rallied for a second day after slumping 3.9 percent on Feb. 26, the largest plunge in six months. The index lost 1.1 percent in February, the first monthly decline since November. Bao Viet Holdings surged by the 7 percent daily limit, a record gain. Ocean Group jumped 4.1 percent.
The government won’t raise retail prices of petroleum products including gasoline to ensure economic stability and keep inflation under control, it said in a Feb. 26 statement.
“The news about unchanged gasoline prices helped ease investor concerns about inflation,” Nguyen Hoai Nam, Hanoi-based deputy head of research at Maybank Kim Eng Securities Joint-Stock Co., said by phone. “Recent drops also made some stocks very cheap and attracted buyers.”
Inflation slowed in February as consumer prices climbed 7.02 percent compared with 7.07 percent in January, according to data from the General Statistics Office on Feb. 23. Monetary policy will be “cautious and flexible” because several factors could cause high inflation to return, central bank Governor Nguyen Van Binh said on Feb. 21. Price growth peaked at 23.02 percent in August 2011.
The VN Index dropped on Feb. 26 on speculation foreign investors are slowing purchases of stocks. The measure slid 3.7 percent on Feb. 21 amid rumors an executive at Bank for Investment & Development of Vietnam had been arrested. The company later denied the rumors.