Vietnam Stocks Retreat on Premier’s Economic Growth Forecast
Vietnam stocks fell, dragging the benchmark index down to the lowest level in a week, after Prime Minister Nguyen Tan Dung gave an economic-growth forecast at the bottom end of the government’s earlier range.
The Ho Chi Minh City Stock Exchange’s VN Index fell 1.4 percent to 472.71 at the 11 a.m. local-time close, the lowest since April 27. The gauge has lost 14 percent in the past year. Bao Viet Holdings, the country’s biggest listed insurer, sank 4.5 percent to 84,500 dong. Masan Group Corp. (MSN), the bourse’s most valuable company, slumped 4.9 percent to 117,000 dong, the biggest decline since Feb. 24.
Vietnam is aiming for annual average economic growth of 7 percent over the next five years as the government strives to tame the fastest inflation since 2008, Dung said at an annual gathering of the Asian Development Bank in Hanoi yesterday. His forecast compares with a target of 7 percent to 8 percent average annual growth until 2020 set out in January by Nong Duc Manh, the Communist Party chief at the time.
“It represents an admission on the part of policymakers that they will not be able to achieve as high a rate of growth as they want to because of the inflationary consequences of overly rapid expansion,” said Dariusz Kowalczyk, a Hong Kong- based senior economist at Credit Agricole CIB. “They will need to focus on controlling inflation, which means that the policy to boost growth cannot be as pronounced as in the past.”
Vietnam’s economic growth will slow to 6.2 percent this year, with high inflation the key challenge facing the country, the regional development arm of the United Nations in Asia Pacific said in its 2011 regional survey, launched yesterday.
“Lower economic growth means business activities will decline, which affects investor expectations on corporate earnings negatively,” said Nguyen Duy Phong, a Ho Chi Minh City-based analyst at ACB Securities Inc., a stockbroking unit of Vietnam’s Asia Commercial Bank.
Consumer prices rose 17.51 percent in April from a year earlier, the fastest pace in 28 months.
--Nguyen Kieu Giang, with assistance from Nicholas Heath in Hanoi. Editors: Reinie Booysen, Darren Boey
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