Improve the fairness and transparency of the stock market, protect investors against volatility

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Improve transparency, protect investors against volatility

Speaking at the opening of the seminar, Mr. Pham Hong Son, Vice Chairman of the State Securities Commission, said that with extensive experience in building and developing the Japanese stock market, JICA has committed to supporting Vietnam Stock Exchange, helping the State Securities Commission to strengthen the capacity of management and supervision, towards the implementation of the goal of "ensure publicity and transparency, strengthen the capacity of management, supervision, inspection and enforcement, protect the interests of investors and the trust of the market" in this project.

Mr Pham Hong Son, Vice Chairman of the State Securities Commission

Accordingly, after a period of implementation, the capacity of the State Securities Commission and the Stock Exchanges in terms of market management and supervision, including the capacity of inspection and supervision of intermediaries, management of listing and management of securities offering to the public, has been improved, thereby improving the fairness and transparency of Vietnamese stock market and protecting investors from market fluctuations.

The number of newly opened accounts of investors has doubled, and foreign investors have been strong net buyers in the last months of the year, showing the growing attraction of the domestic and foreign stock markets. These results have helped to implement "Vietnam's stock market development strategy for the period 2011-2020" and the socioeconomic development plans set out by the Government of Vietnam.

Speaking at the seminar, Mr Shimizu Akira, Chief Representative of JICA Vietnam Office also said that Vietnam's stock market has developed after Vietnam opened. As a result, the market capitalization value at the end of 2020 has exceeded US$180 billion, at the same time, the interest of foreign investors, including Japanese investors, is increasing.

On the other hand, to help the Vietnamese stock market to become a more attractive and convenient capital mobilization channel for businesses, the Vietnamese government has also realized that the improvement of fairness and transparency of the market is an urgent problem. Thanks to that, the government has made efforts and accelerated solutions such as promulgating the amended Law on Securities and establishing the Vietnam Stock Exchange.

"Based on the proposal of the Vietnamese Government, JICA has launched a technical assistance project to strengthen the capacity of the State Securities Commission and the Stock Exchange to improve fairness and transparency for the Vietnamese stock market." - Mr Shimizu Akira said.

There are still many difficulties and challenges

Also at the seminar, Mr. Pham Hong Son said following the successes achieved, Vietnam has started to enter a new development phase of the stock market towards the next goals in the Stock Market Development Strategy in the period of 2021-2030.

The State Securities Commission has provided solutions to achieve the goals in Strategy development orientation, but Vietnam's stock market will still face many difficulties and challenges. On that basis, the State Securities Commission, with the support of JICA, is preparing to enter the next project, "Enhancing the capacity on promoting efficiency of Vietnam's stock market". It is expected to start in April 2024.

"I believe that, after the end of the project "Strengthening capacity on improving the fairness and transparency of the Vietnamese stock market" and proceeding to the next project, the securities market institution will be completed; understanding of market management and supervision, inspection and handling of violations to protect investors' interests, transparency of information in the market as well as corporate governance of listed organizations and the equitization of SOEs by Vietnamese ministries and sector has been improved," Mr. Pham Hong Son said.

Informing about the results of the project "Strengthening capacity on improving fairness and transparency of Vietnam's stock market", JICA experts said the four goals of the project include: enhancing capacity on market supervision of the State Securities Commission and the Stock Exchanges (including inspection capacity); improve the capacity of the State Securities Commission and the Stock Exchanges in supervising market intermediaries to protect the interests of investors in a fair manner towards ensuring market stability; improve the capacity of the State Securities Commission and the Stock Exchanges in management of listing and public offering of securities, focusing on a book-building method to ensure market quality with suitable listed products; raise awareness of the "responsibility to protect investors" among leaders of listed companies as well as other stakeholders.

The results showed that they were relatively consistent with the immediate solutions of the Vietnam Stock Market Development Strategy in 2011-2020 and 2021-2030, as well as the Vietnamese government's socioeconomic development plans. In addition, the project has organized 34 training programs, including face-to-face and online training and 7 seminars. Along with that is the training program and high-level meeting between the two sides; consulting activities are conducted continuously; development of summary documents thereby contributing to developing the legal framework and capacity building for market participants.

Informing the results of the implementation of the Stock Market Development Strategy in 2011-2020, Mr. Vu Chi Dung, Director of the International Cooperation Department (SSC) said that the size, depth and liquidity of the market had been improved; institutions and policies for stock market development have been completed; inspection, examination and supervision are enhanced; the competitiveness of intermediary market institutions has been improved creating a foundation for the development of the stock market in the next period.