This is the confirmation of State Securities Commission (SSC) Chairman Vu Bang in a recent meeting with correspondents. Mr Bang said the long-term and short-term signals were very good and the market would continue to develop in the coming time. Vietnam Business Forum recorded Mr Vu Bang’s judgments about Vietnam’s stock market development in the upcoming time.
The market is on the downtrend with deep corrections and many investors are very worried. What do you think about this movement?
At present, the market correction is only temporary. This is because information on the stock market is not fully available like in developed world markets, and investors’ sentiments are easily affected. Thus, the efficiency of the market is not high. A hot market is further heated up for several months and a cool market is further cooled down in the same way. The second factor is the supply and demand rule and the third factor is several recent policies of the bank, both of which affected the further corrections of the market.
However, the business performances of listed organisations are quite good. The economic growth is positive. The high-quality stakes will be listed on the bourse soon, and market operations and structures have conducted reforms. Thus, the market is developing very well in the medium and long-term. The securities market legal framework is also gradually being completed. We are prepared to report solutions to the Ministry of Finance if the market continues to fall sharply. We will have provisional measures and solutions to keep the market stable. The market is sure to continue developing in the coming time.
What do you think about the increasing capital flows from foreign investors into the Vietnam’s stock market?
Foreign capital flows into Vietnam continue increasing. Through the licensing of custody organisations and recent work with foreign groups, we know the deep concerns of foreign organisations. Especially, many foreign organisations applied to establish joint ventures in securities trading and many world-leading financial organisations like Goldman Sachs and Merrill Lynch have entered Vietnam. What they are concerned about is the outlook of Vietnam’s stock market.
The completion of the legal framework for the development of the market is an urgent demand. Would you mind talking about the implementation of the Securities Law and instructive decrees?
To implement the Securities Law and instructive decrees of the Government, the State Securities Commission (SSC) has drafted and submitted three circulars and nine regulations to the Ministry of Finance for approval.
The SSC is building and completing the draft mechanism on supervision of the stock market, fee and commission plans and a separate bond market plan. The SSC will submit the stock market sustainable development and crisis prevention plans to the Government.
In the coming time, how will the SSC supervise and control appraised information flows?
In my opinion, publications released by international financial organisations need to be transmitted to investors to enable them to understand and analyse the securities environment. The best way is to collect experts’ opinions. It is advisable to let experts and leading groups exchange and raise questions when the market is experiencing corrections. Domestic experts and international organisations should have room to discuss this issue. Only when there is a sharp fall or the market is in a complicated pattern is SSC leader’s direct intervention needed.
Last year, when the market was on the downtrend, I met organisations and asked big companies and banks like Sacombank to tell them to suspend issuances. They were told to buy in fund certificates and SSC leaders spread the announcement on television. SSC only makes recommendations in special situations.
According to the SSC, the two bourses now have 196 listed companies. The total value of listed shares on the market reached VND280,396 billion (US$17.52 billion) on July 27, 2007, 28.8 per cent of GDP in 2006 (a nearly 20-times rise against late 2005). The market is expanding rapidly, with securities trading volume soaring (rising roughly 8 times) and the size of listed and transacted companies increasing.
In the first six months of 2007, foreign investors increased purchases in both bourses. They bought 184 million shares in total, 1.7 times higher than the selling volume of 108 million shares. At HASTC, the buying volume was 2.8 times larger than the selling volume.
Since early 2007, 66 companies have launched initial public offerings (IPO) with total value over VND30,000 billion (US$1.87 billion), three times the same period last year. In addition to the IPO, 57 companies auctioned shares at two bourses with combined value over VND20,000 billion (US$1.25 billion). If bonds are added, mobilised capital would reach some VND60,000 billion (US$3.75 billion), or 6 per cent of GDP.
Lan Anh
Vietnamese
