Vietnam's stocks fell on Friday, capping the worst weekly loss in a year, as investors considered this year's rally overdone amid concern that monetary policy easing may fail to spur growth.
The Ho Chi Minh City Stock Exchange's VN Index declined for an eighth straight day, dropping 1.7 percent to 434.95 at the close. The gauge lost 9.4 percent this week, the biggest weekly drop since May 2011. Vietnam's gross domestic product growth may not meet the government's full-year target, online newswire VnEconomy reported on May 14, citing a government report to the National Assembly.
"It will take two to three months for the reductions in interest rates to really have an impact on businesses," said Pham Anh Tu, deputy director of investment advisory department of DongA Securities Co. "And even if companies can get loans at low interest, it's crucial for them to be able to sell their products."
Vietnam's GDP may grow 4.5 percent in the second quarter, making the official full-year target of 6 percent to 6.5 percent "very difficult to achieve," according to the VnEconomy report. GDP grew 4 percent from a year earlier in the first quarter, the least since 2009.
The VN Index has advanced 24 percent this year, the best performer in Asia, as inflation eased and the government cut interest rates in March and April to spur growth. The measure tumbled 27 percent in 2011 as the central bank raised borrowing costs to tackle the region's fastest price increases.
Ocean Group Joint-Stock Co., a real-estate and financial company, fell 4.6 percent to VND12,600. The stock dropped 21 percent this week, the worst since it started trading in 2010.
Bibica Corp., a confectionery maker, declined 4.4 percent to VND22,000, capping a 16 percent weekly loss, the biggest since April 2009.