Vietnam’s stocks fell to a three-week low after the Ministry of Finance allowed retailers to raise gasoline prices, boosting concern that inflation will accelerate.
The Ho Chi Minh City Stock Exchange’s VN Index slid 2.1 percent to 498.52, the lowest close since May 23. Vietnam Dairy Products Joint-Stock Co., known as Vinamilk, dropped 3.7 percent, the most since April 15. PetroVietnam Gas Joint-Stock Co., the country’s biggest listed company by market value, lost 3.2 percent to 60,000 dong, the lowest level since June 4.
Vietnam National Petroleum Corp., the country’s largest petroleum-products importer, raised prices of 92-RON, the most commonly used grade of gasoline, by 420 dong per liter to 23,750 dong, it said on June 15. The company also increased diesel prices. The risk of inflation still remains, Nguyen Xuan Phuc, Vietnam’s deputy prime minister said June 14.
The increase in gasoline prices plus “weak sentiment” dragged the index lower today, said Michel Tosto, head of institutional sales & brokerage at Viet Capital Securities Co.
The VN Index has declined 5.6 percent from this year’s high on June 7. The gauge has risen 20 percent this year as slowing inflation allowed the country’s central bank cut borrowing costs eight times since March 2012 to spur growth. Vietnam’s inflation rate eased to 6.36 percent in May, the lowest since August 2012, from 6.61 percent in April.