Vietnam Stocks Slumping to New Lows for 2010

This is a fragile time for Vietnam’s economy.  Its stocks have dropped more than almost all other global indexes — more than 3% on Thursday alone to a new 8-month low — because investors are worried banks will be forced to sell equities.  To calm anxious investors, lenders are asking the central bank to delay an increase in required capital adequacy ratios from 8% to 9% that was supposed to have been effective Oct. 1.

The change is intended to ensure the safety of financial institutions as the government prods banks to boost lending to support economic expansion at the same time Vietnam is trying to curb inflation.

Meanwhile, individual and institutional investors are waiting on the sidelines for positive signals that are likely to send the public equity markets surging again — following last year’s 57% rise in the VN Index.

More on Vietnam’s slumping stock market

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