State Securities Commission (SSC) will propose the government of Vietnam to allow establishing the Association of Investment Fund Management Company, said SSC deputy chairman Nguyen Doan Hung.
The proposal is a response to the demand of local investment funds, whose representatives said in a meeting between Ho Chi Minh City Stock Exchange with fund management companies November 16 that they expected to have an association.
Hung also said that his commission is mulling to permit foreign fund management companies to open branches, or set up foreign wholly-owned companies in Vietnam.
In addition, SSC is planning to license securities investment companies and establishment of open funds.
The impact of investment funds on the local stock market has been impressive despite their small number, Hung said, explaining that the current 43 investment funds are major sources of capital flows into the market, accounting for 40 per cent of the trading value.
As shareholders in companies, investment funds have contributed to promoting better and more transparent governance in domestic enterprises, he said.
Le Hai Tra, deputy director of the Ho Chi Minh City Stock Exchange, said the plans of securities funds will drive the market demand in the near future and become a strong factor in determining the level of the VN-Index by the end of the year.
Investment funds said they continued to eye long-term opportunities on the stock market.
Dang Hong Phuong, general director of the SSI Fund Management Co., said his company planned to invest 90 per cent of its registered capital of VND1.7 trillion (US$106.3 million) in the coming IPOs of state-owned enterprises.
VietFund Management Co. plans to establish a VND1 trillion (US$62.5 million) investment fund that focuses on blue chip shares of companies with capital in excess of VND100 billion.
“This way, we can ensure our customers stronger profits in the long-term as well as less risk,” said VietFund general director Tran Thanh Tan.
Indochina Capital, a foreign investment fund that has operated in Vietnam for two years, is likely to pinpoint enterprises that produce and export household products.
“We will allocate capital in a way that bring prosperity,” said Indochina Capital’s managing director Nguyen Tung Kim. “The capital will range from US$5 million to US$65 million. The company will provide strategic supports for the companies, in which it invests into areas including marketing and trade-mark development and so forth”. (Securities Investment, VNA)
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