According to Mr Hung, the high inflation rate has been badly affecting the life of most of Vietnamese people, while the gloomy stock market has an impact on a narrower scale.

Investors now well understand that the top priority task for state management authorities now is to curb inflation, and that the capital for the stock market will be narrowed.

The central bank has recently tightened further the loaning to securities investments by stipulating that commercial banks’ loans to securities investments must not be higher than 20% of bank’s chartered capital. In the latest move, the central bank asked banks to buy VND20tril worth of compulsory treasury bonds in an effort to withdraw money from circulation.

Meanwhile, the foreign capital is still waiting to be disbursed because state management authorities still cannot find out the best solutions to use the foreign capital while not causing such a high inflation rate like in 2007.

In the latest news, the stock market fell down sharply on February 18, 2008 trading session to below 800 points. Explaining the continued fall, analysts said that it was because investors feared that the capital inflow into the stock market would plunge when the central bank has been taking measures to withdraw money from circulation in order to curb inflation.

Tran Ngoc Hai, an investor on ACBS trading floor in HCM City, said that he and other investors have to sell shares to cut losses as it remains unclear when the securities prices can recover. A lot of securities investors have given up the stock market and shifted to inject money in the real estate market.

Thieu Quang Thang, the securities analyst, said that investors have become impatient and begun selling shares as mass media everyday reports about the thirst for capital of the stock market.

Mr Thang said that once the inflation rate become less tense, the real estate market becomes less hot and the world’s economy recovers, the stock market will see a bounce back. However, he said that this will be the scenario to occur only in six months or more.

Source: Tien phong