UPDATE 2-Vietnam to widen share trading bands

(Adds detail, analyst quotes)

HANOI, April 3 (Reuters) - Vietnam will widen its intraday share trading band to 2 percent on its main stock exchange .VNI from 1 percent next week to increase liquidity after recent restrictions stabilised the market, regulators said on Thursday.

The State Securities Commission (SSC) said in a statement on its Web site (www.ssc.gov.vn) that the band on the over-the-counter Hanoi Securities Trading Center .HASTCI would be raised to 3 percent from 2 percent. The changes will take effect on Monday.

The market watchdog said it would "widen the band step by step in the coming time based on the increasingly stabilised market operations".

The current trading bands on both markets were imposed on March 27 to help halt a slump in share prices. The Vietnam index is among the worst performing markets in the world, having lost 43 percent of its value so far this year as liquidity dried up after the central bank tightened monetary supply in an effort to control inflation.

"It is a reasonable move by SSC which would lure investors back to the market and give them sufficient room for now to trade," said Phung Thanh Ha, head of Investment Advisory & Financial Analysis at the Hanoi-based Click&Phone Securities Co.

"Share prices have reached reasonable level given companies' performance and prospects ahead so it is a good time to make investment," Vu Tran Vinh Thuy, Head Analyst at Sacombank STB.HM Securities, told Reuters.

The Vietnam Index rose 0.8 percent to close at 529.23 points on Thursday, before the market regulators' announcement, its seventh consecutive rise.

The over-the-counter Hanoi Securities Trading Center rose 1.4 percent to close at 190.32 points.