GBS - Concerns over tightening on securities-backed lending and release of inflation figures dampened market sentiment early on
Domestic investors were weighing up the potential impact of the SBV’s draft instructions that would replace circulars 13 and 19 with more tightening on securities lending. The draft (1) limits lending for securities investments in terms of repo contracts, cash advances to clients, securities-backed lending and lending for proprietary trading at securities company to 3% of a bank’s charter capital compared to the current regulation of 20% of a bank’s charter capital; (2) requires banks that offers lending for investments to have a CAR of 10% and to maintain their NPL ratio below 3%.
GBS - June’s trade deficit and CPI are expected to improve on a MoM basis but too early to declare a victory
The momentum in June’s inflation is expected to slow but remains high. Friday, Long An’s Statistic Office announced that its CPI in June increased by 0.79% MoM, much lower cf. May’s 2.35%. Long An’s inflation figure was mainly led by food & foodstuff, and footwear & garment items which increased by more than one percent during the month. Transportation items rose 0.41% MoM cf. last month 1,31% and housing and construction materials categories were up by 0.59% MoM cf. 4.45% in May, suggesting that the impact of petrol and electricity price hikes have been absorbed.