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Jan 02, 2024 / 18:27

Vietnam’s stock market expected to close in on global standards

Proactive and coordinated efforts among Government agencies are key to achieving the goal of upgrading Vietnam's stock market from the current frontier to emerging market status.

Vietnam’s stock market should continue to adopt international standards to narrow the development gap with its foreign peers.

 Overview of the ceremony. Photo: The Hanoi Times

Deputy Minister of Finance Nguyen Duc Chi made the remark at a gong-beating ceremony held today [January 2] to kick off the first trading session of the Vietnamese stock market in 2024.

At the ceremony, Chi noted that the economy faced significant challenges in  2023, with GDP growth at 5.05%.

Despite falling short of the 6.5% target, Chi emphasized that Vietnam remains one of the world's fastest-growing economies.

In the face of numerous challenges, the VN-Index reached 1,129.93 points at the end of 2023, a growth of over 12% compared to the end of 2022. Market liquidity surpassed VND17.5 trillion (US$719 million) per session.

The market capitalization of stocks approached nearly VND6,000 trillion ($246.53 billion), a more than 9% increase from the previous year, equivalent to about 62% of the GDP in 2022.

In 2023, the number of new investor accounts increased by over 350,000, bringing the total to over 7.4 million, equivalent to 7.5% of the population.

Of particular note is the launch of the system for trading privately placed corporate bonds on July 19, 2023.

This milestone is considered a significant step in the development of the corporate bond market in Vietnam, contributing to greater transparency and risk mitigation for investors in transactions, said Chi.

“The new platform helps foster liquidity and creates conditions for the sustainable development of the private placement corporate bond market,” he added. The private placement corporate bond trading system currently comprises 869 bond codes from 244 issuing organizations, with a registered transaction value of VND600.7 trillion ($24.7 billion). The average liquidity in the market is VND1.7 trillion ($70 million) per session.

Chi noted that the market was well managed and regularly monitored, ensuring safety and discipline. Looking ahead to 2024, he highlighted the complexity of global and regional situations, which require flexible and prudent financial policies in line with global and regional developments.

To promote the development of the stock market, Chi called for greater efforts to refine regulations, amend laws, and address long-term development obstacles.

“The authorities should ensure the effective implementation of the stock market development strategy through  2030, which was recently approved by the Prime Minister,” he noted.

He also stressed the importance of ensuring the operation of trading, payment, and clearing systems. “The timely integration of new information technology systems is key to ensuring transaction synchronization,” he added.

Moreover, there is a need for new product development, administrative procedure reforms, and creating favorable conditions for listed organizations to register transactions.

Proactive monitoring, strengthening market supervision, timely handling of violations, and protecting investors' legal rights and interests were underscored to restore market confidence.

Chi emphasized the need for proactive and coordinated efforts with relevant sectors to upgrade the Vietnamese stock market from its current frontier to emerging market status.

At the event, the Chairwoman of the State Securities Commission of Vietnam Vu Thi Chan Phuong pledged to guide specific actions for 2024 and efficiently implement the strategic development solutions for the stock market approved by the government.

“This includes perfecting mechanisms, actively monitoring, and enhancing market supervision, as well as further strengthening inspection activities and strictly dealing with market violations,” stressed the head of the stock market’s watchdog.

Additionally, efforts will focus on advancing measures for the development of Vietnam's stock market, making it easier for companies to mobilize capital through the stock market, connecting IPOs with listings, shortening the time between IPO issuance and listing, and proactively disclosing information to investors, she added.