The Vietnamese stock market has experienced changes since it was established five years ago. Particularly, in 2005, mechanisms and policies were amended and supplemented for perfection, which acts as a basis for the management and supervision of the market’s development. Accordingly, the State Securities Commission promoted its co-operation with authorised agencies in building the Securities Law, due to submit to the National Assembly for discussion and approval in May 2006. Also, the issuance of the Decree 238/2005/TTg on lifting the cap for foreign investors’ stake in local enterprises to 49 per cent has received much support from investors. Also, the temporary regulations on transaction organisation and taxation policies for listed enterprises in the Hanoi Securities Trading Centre and the accounting mechanism for securities fund management companies have attracted much attention from investors.
According to the State Securities Commission, from early to December 16, 2005, two securities trading centres in Hanoi and Ho Chi Minh City organised 35 auctions of Government bonds with total value of VND 1,915 billion, including VND 1,635 billion in Treasury bonds, VND 130 billion in the Development Assistance Fund’s bonds and VND 150 billion in bonds of the People’s Committee of Hanoi. Also by December 15, 2005, the two trading centres had organised auctions for 57 enterprises, which sold total 268,917,310 shares valued at over VND 4,125.7 billion.
In 2005, the number of listed companies increased sharply. The State Securities Commission licensed nine more companies to be listed with total charter capital of VND 954 billion and granted certificates for nine listed companies to issue more shares with total 22,316,182 shares.
However, according to the State Securities Commission, the scale of the stock market remains small and it has yet to gain a rapid development as expected. The generation of commodities for the market still faces many difficulties despite concrete and tough measures by the Government and the Ministry of Finance. In particular, management and supervision of the market remains weak due to a lack of synchronous legal documents and mechanisms. The education and dissemination of knowledge about the stock market is still ineffective.
The stock market’s target in 2006 is to increase its scale and improve the quality of concentrated trading floors, striving for its commodities’ (shares) value to reach between two and three per cent of the gross domestic product (GDP). To that end, the State Securities Commission said that legal framework for the market would further be perfected. More importantly, the Securities Law will be submitted for the National Assembly for discussion and approval and under-law documents will be issued. Also, mechanisms and policies on tax, cost accounting and auditing of listed organisations will be perfected. At the same time, the market’s high-quality commodities will be increased. The State Securities Commission will co-operate with the Department of Corporate Finance to develop plans on equitising State-owned enterprises in banking and telecommunication, selling the stake the State does not need to keep. Co-operation with the State Treasury will be boosted to develop plans for issuing bonds in 2006, restructuring the Government bond market to promote activities of secondary market.
Particularly, the State Securities Commission is preparing necessary conditions to put the Deposit Centre into operation to provide deposit, registration and clearing services for securities trading centres; improving the quality of activities of the Ho Chi Minh City Trading Centre by developing a plan to convert it into an exchange. At the same time, the transaction system of the Hanoi Securities Trading Centre will be perfected in accordance with an over-the-counter market with a suitable scale. At the same time, a project on developing information technology for the securities sector throughout 2010, building a Data Centre and perfecting the statistic services of the sector.
Quynh Chi
Vietnamese
