Vietnam Proposed to Set up Fund to Stabilize Stock Market

Fund managers in Vietnam are proposing to establish a stabilization fund to shore up the local battered stock market which has lost close to 80 per cent of its value over the last 12 months.

 

Tran Thanh Tan, chairman of the Vietnam-dedicated Funds Management Club, said that an equities market stabilization fund is needed amidst slumping domestic market indicators.

 

“The stabilization fund should have a capital of around US$500 million with contributions from funds and securities firms, with the government contributing the majority,” Tan said on the sidelines of the market State Securities Commission (SSC) meeting last week which sought measures for 2009 market development.

 

The fund, which should be managed by a government body like state investment arm SCIC, will not look to earn profits but strengthen investors’ confidence, Tan said.

 

Nguyen Doan Hung, SSC’s Vice Chairman, said that a steady market would be one of its top priorities for the year.

 

Setting up a stabilization fund is also one of six measures the SSC proposed in the meeting, besides other such solutions as widening foreign room in banks to 35 per cent, delaying personal income tax for 1 to 2 years, allowing shares sales to strategic investors on negotiable base, permitting foreigners to hold 49 per cent stake in both listed and public firms, and strengthening the roles of associations.

 

The VN-Index closed up 0.78 per cent to 247.66 on March 2. (Investment)