Investors' sentiment weigh on stock market performance: Finance minister
False rumors, concern over the capital flow, and high inflationary pressure have led to the recent market downtrend.
Investors' sentiment continues to weigh heavily on the performance of Vietnam’s stock market, which is still in the early stage of development.
|An investor at a securities company in Hanoi. Photo: Pham Hung|
Minister of Finance Ho Duc Phoc has assessed in a report submitted to the National Assembly.
According to Phoc, in the past months, many stocks' prices have been rising without any positive information on the business performance of the public firms, referring to cases of FLC or Louis Holdings with their respective executives having been arrested for market manipulation.
“False rumor, concern over the capital flow, and high inflationary pressure have led to recent market’s downtrend,” Phoc said.
Last week, the benchmark Vn-Index declined by 14% against late 2021, which resulted in a decrease of 13% in market capitalization.
Concern over the issue of market manipulation has also been echoed by the National Assembly’s Economic Committee, which calls for the Government to take steps to stabilize and ensure the transparency of the stock market.
Such issues, however, have not prevented the rise of the stock market. In 2021, the liquidity rose by 258% against the average of 2020, while the number of new securities accounts was around the cumulative figure in the past 10 years.
As of present, Vietnam has over 5.2 million securities accounts, up 21% against 2021.
The ministry's report also mentioned rising irregularities in the corporate bond market amid its fast development pace, with an example being the arrest of the Chairman of Tan Hoang Minh Group for an appropriation of assets by deceit.
For the past five years, Vietnam’s capital market expanded by 28.5% per year, with the rate going up to 33.2% in 2021.
Total capital mobilized in the market reached over VND1,120 trillion (US$48.29 billion), or 38.7% of total social investment.
As of the end of the first quarter, the market size reached 134.5% of the GDP, of which the stock market made up 94%, the Government bond market 23%, and the corporate bond market 16.4%.
To promote the healthy development of the stock and bond markets, Minister Phoc noted the ministry would revise the regulation on corporate bond issuance in the domestic and foreign markets, with the aim of tightening conditions for bond issuance and strengthening the role of the State Securities Commission of Vietnam (SSC) in supervising the market operation.
Phoc expected the soon formation of a specialized platform for public firms to conduct private placement, for which all bonds are subject to registration with the Vietnam Securities Depository and the stock exchange authority.
“The ultimate goal is to enhance the transparency of the market from the phase of bond issuance to the transaction,” he added.
- Central bank raises forex rate fourth time in 2022
- Key issues discussed for better e-commerce tax collection
- Vietnam’s 9-month budget revenue equals 94% of year’s target
- Vietnam c.bank raises policy rates first time in two years
- Central bank rules out expanding credit growth target
- Vietnam's bond market expands to nearly $100 billion
- Authorities urged to address businesses' “inflating” capital
- Central bank considers expanding credit quota for well-run banks
- Finance ministry offers redemption path for FLC-linked stocks
- Standard Chartered expects Vietnam’s recovery to stay strong this year
Hanoi a top destination for ASEAN investors
Vietnam demands removal of “Little Women” from Netflix
Cultural activities celebrate 68th anniversary of Capital Liberation Day
Vietnam’s economy stands firm in rapid recovery path: AMRO
Macro stability considered key for Vietnam’s growth in remaining months: Gov’t
Local firms urged to stay proactive in intellectual property protection
Vietnam needs to expand airport network to relieve pressure on infrastructure
Vietnamese, foreign firms must store data in cyberspace from October
Trade cooperation: Highlight of Vietnam-EU relations