The Vietnamese government is determined to work for the upgrade of the local stock market to emerging market status soon from frontier grade now, stated Deputy Prime Minister Vuong Dinh Hue, who is in charge of economic issues.
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Before Hue's statement, Chairman of the State Securities Commission of Vietnam (SSC) Tran Van Dung affirmed with drastic measures from the government in creating a level playing field for both local and foreign companies, Vietnam can achieve the target of becoming an emerging securities market in the next two years.
The upgrade depends on the development potential of Vietnam's market and macro policies, Dung continued.
Traders reacted positively to the news. The benchmark VN-Index closed 1% to 979.21 on August 21, the highest in nearly two months.
With regard to the corporate bond market, Deputy PM Hue stressed the necessity of having credit rating agencies and a corporate securities trading center to create liquidity for corporate bonds.
"Vietnam has to be active in mobilizing mid- and long-term capital from both internal and external sources," Hue added.
Regarding the equitization process of state-owned enterprises (SOEs), the deputy PM noted that despite the low number of SOEs going through the process, the proceeds have been at high level.
In the first six months of 2018, transaction value from equitization process doubled that of 2017, Hue tipped. "The process is not as slow as it appears. Vietnam has disclosed necessary information for investors, which shows the transparency of the market."
Alwaleed Alatabani, specialist at the World Bank suggested two solutions to stimulate the growth of Vietnam's stock market. Firstly, foreign investors are interested in investment funds for Vietnamese pensioners, which can be launched in the next three years, he said.
Secondly, Alatabani pointed to high capital accumulation among citizens of nearly US$60 billion, which has not been tapped for economic development.
"For long-term investment, there should be ways to mobilize idle funds from citizens, while creating favorable environment for investors to stay in long-term. This would be key for the development of Vietnam's stock market," Alatabani added.
