Vietnam shares fall under widened trading band

HANOI, June 19 (Reuters) - Vietnam's stock market .VNI, the world's worst performer this year, ended 2.3 percent lower on Thursday, the first day of an expanded trading band, as markets fretted over double-digit inflation and a trade imbalance.

"Investors are taking opportunities to unload and adjust their portfolios with the new trading band," said Lawrence Kook, chief investment officer of Maxford Investment Management, a Hong Kong-based fund for Greater China investors.

Spiralling prices of food and fuel and high credit growth in Vietnam have led to seven consecutive months of double-digit inflation, more than 25 percent in May.

The 8-year-old stock market has tumbled 60 percent this year after a surge between August 2006 and March 2007 when the index trebled.

Ratings agencies have downgraded outlooks on the developing Southeast Asian economy, also citing the fragility of the young banking system faced with a liquidity crunch.

The Ho Chi Minh Stock Exchange ended at 373.3 points, near the low end of a 3 percent trading band either side, which came into affect on Thursday. The index fell for a second day in a row after edging up in the past four sessions under the previous trading band of +/- 2 percent.

The State Securities Commission, the market watchdog, has adjusted the trading band several times this year to try and halt a slump in share prices.

The smaller, over-the-counter Hanoi Securities Trading Center .HASTCI fell 1.2 percent on Thursday. (Reporting by Grant McCool and Ho Binh Minh; Editing by Anshuman Daga)