Vietnam have built a set of measures to stabilize its stock market amid difficulties in the post-crisis period for a sustainable development in coming years, said Nguyen Doan Hung, vice president of the State Securities Commission (SSC) said.
The commission will consider amending the Law on Securities to submit to the National Assembly in 2011; and build strategies on developing Vietnam’s stock market during the period of 2011-2020, Hung said in a speech given at a seminar titled “Vietnam economy: opportunities and challenges after global financial crisis” held in Ho Chi Minh City September 9.
Foreign ownership in a single local bank, currently limited at 30%, will be raised to above the cap to draw back shrinking overseas inflows.
Local banks are not required to ask for approval from the central bank to sell less than 5% stake to a foreign bank, which is aimed to improve their financial capacity and attract foreign currency, Hung said.
The government will continue equitization of state-run enterprises; allow them to sell stake to strategic partners on negotiation basis rather than via auctions as currently.
The SSC will build up measures to deal with poorly performing brokerage firms and listed firms to prevent negative impacts on the market. Public companies will be forced to improve accounting quality and information disclosure.
To support the equities market, Hung said the government will also stabilize the macro economy, with applying further loosened monetary policies to ensure stability in forex rate, interest rates and inflation; offering tax incentives to boost exports and domestic consumption.
By the end of August, Vietnam had 580 listed companies with a combined market capitalization of VND700 trillion, accounting for 40% of the country’s GDP versus 18% by end-2008. As many as 966,500 accounts, including 14,502 those of foreign investors, were managed by 105 securities firms.
It has developed four markets, comprising the Hochiminh Stock Exchange, Hanoi Stock Exchange, the market for unlisted public companies (UpCom) and a dedicated bond market.
The VN-Index closed at 463.68 on September 9, down 6.3% year-to-date. (Investment)
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