Vietnam stocks stem slide on new govt policy

HANOI, March 26 (Reuters) - Vietnam's main stock exchange gained 1.6 percent on Wednesday, stemming a slide of eight straight days, after the government introduced a series of measures to try and reassure panicked investors.

The Ho Chi Minh Stock Exchange .VNI has lost nearly 22 percent since March 14 after the failure of earlier government efforts to boost the market, including a share buy-back plan.

The rout on shares this year began with liquidity drying up as the central bank tightened money supply to try and control soaring inflation, which hit an annual rate of 19.39 percent in March. [ID:nSP74248].

The market closed at 504.67 points on Wednesday after a new government directive asked the central bank to order state-owned banks and "encourage" private banks to immediately halt the sales of collateralised and repo contracts [ID:nHAN222568].

It also ordered the central bank to increase foreign exchange purchases" from commercial banks including forex transfers from foreign share investors.

"The government's concrete measures have been welcomed by investors who were desperate for good news," an analyst at Dong A Securities in Hanoi said.

The index is down 46 percent this year, the worst performer in Asia, despite an overall positive long-term view of an economy growing at an average 7 percent a year since 2000.

In another measure announced on Tuesday to stop the sell-off, the State Securities Commission market regulator said it would temporarily narrow its intraday share trading band to 1 percent from 5 percent, starting on Thursday [ID: nHAN91817].

The market regulator also cut the share trading band on the over-the-counter Hanoi Securities Trading Center .HASTCI to 2 percent per day from 10 percent, also starting on Thursday.

The Hanoi market rebounded by 5.3 percent to close at 175.31 points on Wednesday. (Reporting by Nguyen Nhat Lam, editing by Grant McCool and Lincoln Feast)