Vietnam’s stock market regulator, the State Securities Commission (SSC), will focus on stabilizing and restructuring the securities market this year and prepare for long-term plans as the year of 2009, though very difficult, will offer great opportunities, the SSC Chairman Vu Bang said on February 4.
“The SSC will speed up the process of opening an exchange for unlisted stocks and setting up a bond market,” Bang said, noting that the regulator will also look at connecting domestic stock markets with regional Asian counterparts.
The bond market should open in the second quarter of the year, Bang revealed. “We are considering whether to allow lending against bonds and lending against some stocks,” he said.
The SSC plans to keep a closer eye on auditing firms that audit listed companies in order to improve the firms’ information disclosure and protect investors, said Bui Hoang Hai, deputy head of the Issue Division under the SSC.
To encourage foreign investment, the commission will also propose to allow foreign investors to own up to 49 per cent stake in both listed and public companies.
Bang said the SSC will limit its intervention in the stock market. “The market now relies on the economy, not investor sentiment. So the possibility of intervening in the market, such as adjusting the stock daily trading, is low,” he noted.
The SSC adjusted the daily trading band four times last year in an attempt to stopping the market’s free-fall. The current band is 5 per cent.
Vietnam’s 338 listed companies mobilized VND29 trillion (US$1.65 billion) last year, down 77 per cent on year, Bang noted. The market capitalization in 2008 reached VND225 trillion (US$13 billion), accounting for 17.5 per cent of the country’s GDP.
The foreign holdings also dropped US$4 billion last year at US$4.6 billion, two third of which are held by closed funds. Foreigners sold mainly bonds and highly liquid stocks in 2008, which is not worrying, Bang said.
Many foreign financial institutions predicted the Vietnamese market, which plummeted 68 per cent last year, will rally in the third quarter. (Vietnam Economic Times, Thanh Nien Daily)
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