SSC Proposes Urgent Action Plan to Get Bourse Back on Track

The State Securities Commission (SSC) will focus on immediate and urgent solutions to help ease the bad impacts of the global financial crisis on Vietnam’s stock market and get local bourses back, SSC’s International Cooperation Department Director Nguyen Ngoc Canh said.

 

Canh said the central bank should narrow official exchange rate to the inter-bank rate, widen the trading band to 4 per cent-5 per cent from the current 3 per cent, and further ease monetary and fiscal policies to help enterprises access capital at lower costs.

 

Policies to encourage exports and limit imports by using allowed tax or non-tax barriers should also be applied, he noted.

 

The financial measures are expected to help boost exports and encourage capital inflows into the country.

 

To help boost the market which plunged by 70 per cent last year, the SSC has requested public companies to buy back their shares, reduce registered capital rather than buying back as treasury stocks, limit share dividends and discourage poorly performing firms, Canh said, noting that the measures would help raise stocks’ value and gain investor confidence.

 

When privatized, shares and controlling stakes should be sold via public auctioning to strategic investors who pledge sound investment and development plans to help create transparency during the process.

 

The government should also stop converting state-owned enterprises into one member limited liability companies or sell only a small portion of their stakes at lower than 20 per cent, which can cause negative factors and lack of transparency, he said.

 

The local stock market is expected to recover in the second half of this year, analysts forecast, after strong action of the Vietnamese government and market authorities. (VIR)