HANOI, May 20 (Reuters) – Vietnam’s small-cap bourse, the
Hanoi Stock Exchange , slid to an all-time low on Friday
as liquidity and confidence dwindle, marking another milestone
in the country’s fall from favour for foreign and domestic
investors alike.

The six-year-old Hanoi market ended the week off about 5
percent at 76.98 points after dipping as low as 76.81 points on
Friday. It’s prior historical low was 77.55 points, which it
touched during the depths of the global economic crisis on Feb.
24, 2009.
    The exchange, populated with penny stocks and largely the
arena of domestic investors, has a total capitalisation of just
$5 billion. Market analysts say foreign investors are interested
in only a handful of the largest stocks. The biggest stock on
the market is Asia Commercial Bank , which accounts for
about a fifth of the total market cap.
    Still, Hanoi’s fall of more than 50 percent over the past
year can be seen as a gauge of how negative the conditions and
sentiment have become during a period of macroeconomic upheaval
at home and abroad, analysts say.
    Vietnam’s other stock market, the Ho Chi Minh Exchange
, which accounts for about 85 percent of Vietnam’s
combined market capitalisation, is off about 10 percent
for the year. By comparison, the MSCI Asia-Pacific ex-Japan
index has risen more than 30 percent over the past 12
months.
    Foreign interest is a shadow of what it was in 2006-2007
when risk appetite was higher and Vietnam, a new World Trade
Organisation member then, was the next big thing.
    “I think it’s very much a macro story,” said Sriyan Pietersz
with JP Morgan in Thailand. “No one denies that Vietnam has some
dynamic companies and the overall structural picture, from a
demographic perspective and in terms of investment
attractiveness, is there. But you need the macroeconomic
stability to hold up as well.”
   
    ADVERSE SIDE EFFECTS
    The economy has been on a rollercoaster ride since 2007 when
hefty inflows contributed to overheating that pushed annual
inflation to nearly 30 percent by August 2008. The authorities
applied the brakes, only to find themselves faced with the
global downturn, so they changed tack to promote growth.
    A political cycle leading up to the 11th National Congress
of the Communist Party, which selected a new leadership line-up
in January, kept priorities skewed towards growth, but now Hanoi
is battling double-digit inflation. In April, annual inflation
was at 17.5 percent and it is likely to be higher this month,
economists say.
    In response, the State Bank of Vietnam has repeatedly raised
interest rates in recent months, trimmed its credit growth
target and sought to aggressively cut lending to “non-productive
sectors” including securities and real estate.
    Margin calls have been on the rise as a result, said Nguyen
Hoang Long, investment director at An Binh Securities Co. He
added that banks were also under pressure from central bank
rules that require them to raise their registered capital.
    “The moves will do good to maintain macroeconomic stability
in the long term. However, they have adverse side-effects on
cash flows,” Long said.
    Since January, only about 15 stocks out of more than 300 on
the Hanoi exchange are in positive territory, Reuters data
showed. More than 45 stocks were down by 50 percent or more.
    “The southern market won’t fare as badly,” said Adrian
Cundy, director and head of research at VinaSecurities. “The big
risk for the Ho Chi Minh City exchange is if investor sentiment
turns very negative towards the large-cap stocks.”
    A recovery was still probably at least a quarter or two
away.

HANOI (Reuters) – Vietnam has deployed troops to contain a rare protest by ethnic Hmong Christians, some of whom were calling for an independent kingdom, diplomatic and other sources said on Friday, and the government indicated the unrest was still going on.

The demonstration by as many as 7,000 people in the far-flung mountains of Dien Bien Province, near the northwestern border with Laos and China, began several days ago, but details were scant from the hard-to-access region.

HANOI, May 5 (Reuters) – Indonesia’s finance minister Agus
Martowardojo said on Thursday he is confident inflation can be
kept within the government’s target this year, despite building
inflationary pressures that some economists say will make that
task difficult.

The central bank has allowed the rupiah to appreciate
some 5 percent so far this year to near a 7-year high of about
8,600 per dollar to fight inflation and help mitigate a wave of
incoming capital, and Martowardojo said he was comfortable that
exporters could be competitive at that level.

HANOI (Reuters) – India’s fight against inflation could knock about half a percentage point off economic growth in Asia’s third-largest economy this fiscal year, Finance Minister Pranab Mukherjee said on Wednesday, a day after the Reserve Bank of India (RBI) raised rates.

“It may be around… 8.5 percent. So, it will be about half a percent,” he told Reuters when asked about the impact of stubbornly high inflation on gross domestic product growth.

HANOI, May 4 (Reuters) – India’s fight against inflation
could knock about half a percentage point off economic growth in
Asia’s third-largest economy this fiscal year, Finance Minister
Pranab Mukherjee said on Wednesday, a day after the central bank
raised rates.

“It may be around… 8.5 percent. So, it will be about half
a percent,” he told Reuters when asked about the impact of
stubbornly high inflation on gross domestic product growth.

HANOI, May 4 (Reuters) – Asia could dominate the world
economy by 2050, provided it avoids the traps that have seen
other emerging countries stall, and that meant it has to do its
part in reducing global imbalances, top policymakers said on
Wednesday.

French finance minister Christine Lagarde said Asia could
not be a bystander in the Group of 20′s drive for “solid,
sustainable and balanced” global growth, while China’s deputy
finance minister Li Yong said the region should speak with one
voice.

HANOI, May 3 (Reuters) – Vietnam said on Tuesday fighting
inflation took precedence over growth and as a result GDP would
miss the official target, underscoring a key concern for the
region as Asian officials met in Hanoi to discuss ways to pursue
a sustained upturn.
    Rising prices across the region must be “carefully managed”
via a mix of policies to minimise the impact on Asia’s vast
population of poor people, Asian Development Bank President
Haruhiko Kuroda said at the start of the ADB’s annual meeting.
    All major economies in the region have tightened monetary
policy to contain inflationary pressures that have built up
during a strong recovery from the global crisis.
    On Tuesday, the Reserve Bank of India said fighting
inflation was the priority as it raised interest rates by a
higher-than-expected 50 basis points.[ID:nL3E7G30NW]
    Volatile capital flows and surging commodity prices will be
key topics of discussion when finance ministers from East Asia’s
top three economies — China, Japan and South Korea — meet with
their Southeast Asian counterparts on Wednesday.
    
   ”The top priority is to fight inflation. We are no longer
prioritising GDP growth. We want to keep GDP growth at a
reasonable level that is acceptable in this inflation
situation,” Vietnam’s Minister of Planning and Investment Vo
Hong Phuc said.

Growth was now expected to be 6.5 percent and inflation
11.75 percent in 2011, Phuc told a forum at the Asian
Development Bank’s (ADB) annual meeting in Hanoi.

HANOI, April 29 (Reuters) – Vietnam’s central bank tightened
credit for the second time in four weeks on Friday, increasing
two policy rates days after the government reported inflation
was at its highest level in over two years, but some economists
said rates may be near a peak.

The State Bank of Vietnam raised the refinance rate by 100
basis points to 14 percent and the discount rate by the same
amount to 13 percent, following increases in the refinance rate
and reverse repo rate on April 1.

HANOI (Reuters) – A legal scholar who sued Vietnam’s prime minister and called for an end to one-party rule was sentenced on Monday to seven years in prison in one of the Communist country’s most important political trials in years.

The Hanoi People’s Court convicted Cu Huy Ha Vu, the 53-year-old son of a Vietnamese revolutionary leader, of spreading propaganda against the state.