On the HCM City exchange, the VN-Index lost 7.02 points, or 1.99 per cent, to close at 345.05, but trading volume plunged by an even more dramatic 23 per cent over the previous day, to just 10.6 million shares, for a total value of VND379.2 billion (US$22.57 million) on the day.

Except for Sacombank (STB), with 1.7 million shares changing hands, and Saigon Securities Inc (SSI) with 831,000 shares, most shares saw only minimal trading activity.

Foreign investor transactions were also modest, with only 785,000 shares bought and a million units sold. Net sales reached just VND3.7 billion ($220,000) on the day.

"It's hard to determine whether the market has experienced its worst time," said EuroCapital Securities analyst Ngo Van Minh. "With few factors expected [in the coming weeks] to support market growth, there's little chance that the market will rally in the short to medium term."

A EuroCapital Securities report cited negative international developments over the past week, including news that the eurozone had fallen into recession, the struggles of the US automotive industry, and increasing global unemployment. The report also quoted a Standard & Poor's rating that forecast Viet Nam to be among three nations in Asia most at risk of the credit crisis, alongside Pakistan and Sri Lanka.

Vietcombank had adjusted its bad debt target for the year from 2.8 per cent to just under 5.8 per cent, a move suggesting the economy was still facing many dangers ahead, it said.

Sacombank had also started buying back 25 million shares, and a number of State-owned commercial banks had slashed lending rates this week in an effort to ease business access to credit and try to shore up confidence, the report said.

Since the situation on world financial markets remained unpredictable and was tending to get worse, Minh said, domestic companies' year-end business results might be disappointing.

In Ha Noi yesterday, trading volume dropped 47.5 per cent to 4.7 million shares with a total value of VND130.7 million ($7.8 million). The HASTC-Index shed 2.41 per cent to end the day at 110.35 points.

Asia Commercial Bank led the Ha Noi market, but with orders for only 660,000 shares, followed by Petroleum Technical Services Corp (PVS) and Kim Long Securities (KLS) with around 400,000 shares traded each.

Source: Viet Nam News