Friday, 24 May 2019

Vietnam ministry eyes measures to boost stock market

Updated at Monday, 11 Jun 2018, 15:38
The Hanoitimes - The Ministry of Finance (MoF) has unveiled a series of measures to beef up the local stock market which it considers an important channel to mobilize funds for the economy.
Measures for stock market development

The MoF and the State Securities Commission of Vietnam has proposed a series of measures to ensure healthy and sustainable development of the stock market. 

Firstly, the revised Law on Securities is expected to be finalized and submitted to the National Assembly for consideration in the upcoming session in October. 

Secondly, the Government will accelerate the equitization and divestment of SOEs

Thirdly, with more quality investment choices, foreign investors will be able to diversify their portfolios in the stock market, in turn bringing further capital into the country. 

Fourthly, the stock market will be developed through diversifying government bonds and the launch of corporate bond market, which is scheduled in 2018. 

Fifthly, no effort is spared for Vietnam stock market to be classified as an emerging market from its current status as a frontier market. 

Sixthly, enhancing capabilities of intermediaries and restructuring securities companies for better service provision. 

Seventhly, the MoF and related government agencies will push forward with restructuring the stock market upon the Prime Minister's request. 

Eighthly, increasing efficiency in managing and supervising stock market activities. 

Ninthly, encouraging more companies to go public and supporting them in capital mobilization.

Market capitalization on the rise

In 2017, Vietnam's stock market capitalization in 2017 reached over VND3,500 trillion (US$154.5 billion), equivalent to 70.2% of the country's GDP and exceeding the Government's target for 2020. 
Illustration photo.
Illustration photo.
As at May 24, the stock market capitalization had increased to VND3,800 trillion (US$167.5 billion), up 9.4% as compared with the end of 2017 and of 76.8% of GDP. Witnessing a strong growth in the first quarter of 2018, the VN-Index outgrew its peak on 2007 and closed at 1,204.33 points on April 9, up 22.4% against the end of last year (2017).

The stock market has been contributing positively to the Government's efforts of equitization and renovation, the MoF claimed. 

The Government raised a record high of nearly VND123 trillion (US$5.43 billion) by divesting its stake in state-owned enterprises (SOEs) in 2017, 7.8 times higher against 2016 and contributing over VND1.9 trillion (US$83.8 million) to the state budget.

In 2017, foreign investors net purchased VND47.8 trillion (US$2.1 billion) worth of Vietnamese securities, 8 times higher than the figure recorded in 2016. The total portfolio value of foreign investors in Vietnam's stock markets reached nearly US$32.9 billion by the end of 2017, up 90% year-on-year. Foreign indirect investment stood at US$2.9 billion, doubling the figure for 2016. 

According to the MoF, the number of accounts registered at stock market was estimated at over 2 million as at April, of which over 25,000 accounts belong to foreign investors, up 6% as compared with the end of 2017. The portfolio value of foreign investors by the end of April has increased to US$36.2 billion, up 10% against the end of 2017. 

The market capitalization of the Unlisted Public Company Market (UPCoM) reached VND677.7 trillion (US$30 billion), tripling the value as compared with the end of 2016.
Ngoc Thuy
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