Vietnam Plans to Build Stable Capital Market
The government of Vietnam said on August 6 that Prime Minister Nguyen Tan Dung has just approved the plan on stable capital market development from now till 2010 and vision toward 2020.
The plan is aimed to complete legal framework and tighten state management over the market to ensure the country’s financial security in the global integration process.
The securities market will play a decisive role and the market capitalization will be raised to 50 per cent of the country’s gross domestic product (GDP) by 2010 and 70 per cent by 2020 like other markets in the region, the report said.
In the long term, the government will adopt four measures to modernize the capital market, to complete the legal structure to help link it with international securities exchanges to attract investors in addition to taking tighter monetary policies to maintain macroeconomic development.
The government will take seven short-term measures to diversify the supply of government, corporate bonds, to speed up the privatization of state-owned corporations, groups and commercial banks, to allow the issuance of more shares and to develop securities derivatives such as options and futures.
Under the plan, the bonds market will be separately formed and the financial capacity of stock companies and fund management firms will be boosted.
By end-2006, Vietnam’s stock market capitalization hit US$14 billion, representing 22.4 per cent of the country’s GDP and over 200 joint stock companies had been listed at two securities trading centers in addition to more than 400 listed bonds worth US$8 billion.
Vietnam will continue to develop the capital market, raising total capital demand to US$140 billion in 2006-2010, according to Finance Minister Vu Van Ninh.
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