IPOs needed to improve market

The Government needs to enlarge the scale of the market and lure more State-owned enterprises to list shares through speeding up their equitisation, according to Luu Trung Thai, Vice Chairman of the Military Commercial Joint Stock Bank.

Such a move would improve the sustainability of the securities market in 2018, he said at a meeting on January 22.

However, the market’s total capitalisation, which was equal to 75% of the country’s total gross domestic product (GDP), is far lower compared to other markets in the region, he added.

For example, the figures for Thailand, Singapore and Hong Kong – three of the biggest markets in Asia – are 103%, 215% and nearly 1,000%, respectively, Thai said.

ipos needed to improve market

Though the size of the securities market doubled on a yearly basis in 2017 and became more attractive to investors, the banking system remained the most important channel for the Vietnamese economy to raise funding and capital, he said.

“In comparison, the total credit of the banking system in Vietnam now accounts for 130% of GDP, double that of the stock market. This means that the channel for capital to the economy remains heavily dependent on the banking system,” he said.

Thus, he proposed the two stock exchanges should be merged and the post-merger market regulator should be divided into various specialised units in various industries while the legal system must be completed to improve the transparency of corporate information disclosure.

Vietnam’s securities market will improve this year as domestic investors have become more professional with their investment decisions and more foreign investors are attracted to the local markets, vice chairman and CEO of the Vietnam Investment Fund (VFM) Tran Thanh Tan, said during an interview on the sidelines of the meeting.

Tan said better macroeconomic conditions will also support the securities market in 2018, especially the Government’s efforts to equitise and privatise SOEs and bring them to the securities market.

“The size of the securities market can account for 100% of the country’s GDP in 2018,” he said. “As the Government puts more SOEs with high-quality assets for sale, more investors will participate in the market.”

According to Deputy Prime Minister Vuong Dinh Hue, the Government plans to offload its ownership in 245 SOEs in 2018 with the value being 6.5 times the figure earned through 2017.

Deputy Minister of Finance Tran Xuan Ha said challenges have remained for Vietnamese securities in 2018.

He said that the Law on Securities must be amended to replace the current regulation and the new one must be submitted to the National Assembly for review at its second meeting this year.

The development of the new securities law is expected to resolve the imbalance between the stock and the bond markets and between the government and corporate bonds, Ha said.

“We hope the associations and the market members in collaboration with the State Securities Commission and the Ministry of Finance to build this law has the results," he said.

Draft margin lending policy

The draft margin lending policy that requires initial margin ratio contracted by securities firms for margin lending to be increased to at least 60 percent, from the current 50 percent, could take effect in early March instead of February, the State Securities Commission (SSC) chairman Tran Van Dung said.

The SSC had delivered a survey among brokerage firms, organisations and market regulators on the new policy, he said. “By the end of Friday [January 19], the SSC had received 32 of 51 surveyed securities firms. Those that has not given their feedback, the SSC will consider them agreeing to the draft policy.”

Of the 32 companies that have sent feedback on the draft policy, 22 firms agree with the draft regulation and the remaining 10 disagree. Therefore, the draft policy could be realised, Dung said, adding that the 22 companies account for 80% of the market share for margin lending activity.

Foreign investors record US$1.23 billion in net buy value

According to the State Securities Commission (SSC), foreign investors in 2017 recorded a decade-high net buy value of VND28 trillion (US$1.23 billion) in 2017 and the figure is expected to rise in 2018.

The total of foreign net buy value for bonds reached VND18.7 trillion, or US$825 million.

Total value of foreign asset portfolios in 2017 reached 32.9 billion USD, a yearly increase of 90 percent, proving that foreign investors are very keen on the prospects of the local securities market.

Again, the figures are expected to increase in 2018.

In January 2018 alone, foreign investors remained net buyers in all trading sessions of the month with total net purchase value of VND7.2 trillion, focusing on food and beverage, banking-finance and real estate sectors.

As the domestic securities market has shown big improvement, brokerage firms estimate their earnings in 2018 will get better than the previous year.

The net profit of the entire brokerage industry for 2017 is estimated at VND7 trillion, twice the figure recorded in 2016.

Such a big improvement is attributed to the growth of the market in both size and product quality.

The benchmark VN Index has increased by total 63.5% since the end of 2016 to a decade-high of 1,087.42 points at the end of January 22.

The total market capitalisation has risen to VND3.8 quadrillion (US$168.9 billion), equal to 77.2% of the country’s total GDP, and market trading liquidity has gained 90% to VND9.6 trillion each session compared to last year’s average daily figure.

Source: VNA

Related News

Strengthening the financial “health” of state-owned enterprises

Strengthening the financial “health” of state-owned enterprises

VCN - The state economy plays a key role in the socio-economic development process, but it is necessary to strengthen the financial health and competitiveness of state-owned enterprises (SOEs).
Amending the Law to create the best conditions for state-owned enterprises

Amending the Law to create the best conditions for state-owned enterprises

VCN - So far, more than a dozen seminars and discussions have been held to solicit opinions on the draft Law on Management and Investment of State Capital in Enterprises. This is a complex bill, with a large impact and many issues to be discussed, it has attracted great attention from management agencies for the sustainable development of the state-owned enterprise (SOE) sector.
Revise Law to promote autonomy, and self-determination of the state-owned enterprises

Revise Law to promote autonomy, and self-determination of the state-owned enterprises

VCN - One of the issues of concern when the Ministry of Finance consults on the new draft law on management and investment of state capital in enterprises, is to increase autonomy and reduce compliance conditions for state-owned enterprises.
Reviewing policies when state-owned enterprises are not profitable

Reviewing policies when state-owned enterprises are not profitable

VCN - Because funding for electricity supply goals, Vietnam Electricity Group (EVN) is not yet profitable, the EVN’s representative proposed that the draft Law on State Capital Management and Investment in Enterprises should take into account separate policies for enterprises like EVN.

Latest News

More tax law reforms needed to address e-commerce challenges

More tax law reforms needed to address e-commerce challenges

The rapid growth of e-commerce has contributed significantly to Vietnam's economic development, but it also brought challenges, particularly in tax management.
Ho Chi Minh City achieves record state revenue of over VND500 trillion in 2024

Ho Chi Minh City achieves record state revenue of over VND500 trillion in 2024

VCN - For the first time in its history, Ho Chi Minh City’s budget revenue surpassed VND500 trillion in just 11 months of 2024.
Accelerating public investment in national key transportation projects

Accelerating public investment in national key transportation projects

VCN - According to the Ministry of Finance, the disbursement of funds for national key transportation projects in the first ten months of 2024 exceeded the average disbursement rate for other sectors. However, the pace has slowed in recent months.
Disbursement of public investment from foreign loans reaches 39.06% of the plan

Disbursement of public investment from foreign loans reaches 39.06% of the plan

VCN - At a conference held on December 3, 2024, to discuss the disbursement progress of public investment from foreign loans in the final months of the year, the Department of Debt Management and External Finance reported that ministries and agencies had disbursed over VND3.285 trillion. Notably, six ministries proposed returning a total of VND2.0924 trillion from the 2024 allocated budget.

More News

State capital management commission to be dissolved

State capital management commission to be dissolved

The Commission for Management of State Capital at Enterprises will cease its operations, following Resolution No 18 of the Central Party Committee.
There is still room for credit growth at the end of the year

There is still room for credit growth at the end of the year

VCN - To achieve the credit growth target of 15% for the whole year of 2024 as directed, the banking system will have to "pump" out nearly VND 670,000 billion of loans to the economy in the last 2 months of the year, so many solutions are needed to accelerate capital flow.
The importance of user-friendly tax platforms for online retailers

The importance of user-friendly tax platforms for online retailers

VCN - The e-portal for individual and business households engaging in e-commerce activities has been completed. Trial runs for its interface, operational solutions, and functionality have also been finalized, with plans to officially roll out the portal soon.
Nearly 30 trillion VND mobilised through G-bond auctions

Nearly 30 trillion VND mobilised through G-bond auctions

The Hanoi Stock Exchange successfully organised 17 Government bond auctions in November, raising 20.76 trillion VND (817.56 million USD) for the State Treasury.
Expecting cross-border M&A deals

Expecting cross-border M&A deals

VCN - In order for the Vietnamese mergers and acquisitions (M&A) market to grow stronger and become a destination for global capital flows, in the current context, the driving force of cross-border deals is still needed.
Credit growth target of 15% for 2024 within reach: SBV

Credit growth target of 15% for 2024 within reach: SBV

The banking system's credit growth had risen by 11.12% as of November 22 compared to the end of 2023, hence the 15% growth target for the whole year is reachable, according to the State Bank of Vietnam (SBV).
Multiple drivers propel positive growth in budget revenue

Multiple drivers propel positive growth in budget revenue

VCN - Dr. Bui Dang Dung, former Deputy Chair of the National Assembly’s Finance and Budget Committee, believes that the 2024 state budget revenue results are highly encouraging, reflecting the concerted efforts of the Government, relevant agencies, and the business community amid challenging economic conditions.
Drastic measures needed to accelerate disbursement of foreign-funded public investment

Drastic measures needed to accelerate disbursement of foreign-funded public investment

Drastic measures are needed to remove roadblocks and accelerate the disbursement of foreign-funded public investment in the remaining months of this year, as the disbursement rate remains far below the target of 95 per cent, according to the Ministry of Finance.
Urging collection of land-related revenues in the last month of the year

Urging collection of land-related revenues in the last month of the year

VCN – In order to achieve the highest revenue target in the last month of 2024, creating momentum for the good implementation of socio-economic development tasks in 2025 and the period 2026 - 2030, the Prime Minister assigned the Ministry of Finance to promote revenue management solutions, strictly control tax assessment, tax declaration, tax payment, and collect arising revenues, especially revenues related to land.
Read More

Your care

Latest Most read
More tax law reforms needed to address e-commerce challenges

More tax law reforms needed to address e-commerce challenges

The rapid growth of e-commerce has contributed significantly to Vietnam's economic development, but it also brought challenges, particularly in tax management.
Ho Chi Minh City achieves record state revenue of over VND500 trillion in 2024

Ho Chi Minh City achieves record state revenue of over VND500 trillion in 2024

For the first time in its history, Ho Chi Minh City’s budget revenue surpassed VND500 trillion in just 11 months of 2024.
Accelerating public investment in national key transportation projects

Accelerating public investment in national key transportation projects

According to Ministry of Finance, the disbursement of funds for national key transportation projects in the first ten months of 2024 exceeded the average disbursement rate for other sectors. However, the pace has slowed in recent months.
Disbursement of public investment from foreign loans reaches 39.06% of the plan

Disbursement of public investment from foreign loans reaches 39.06% of the plan

Regarding disbursement progress of public investment from foreign loans in the final months of 2024, Department of Debt Management and External Finance reported that ministries and agencies had disbursed over VND3.285 trillion
State capital management commission to be dissolved

State capital management commission to be dissolved

The Commission for Management of State Capital at Enterprises will cease its operations, following Resolution No 18 of the Central Party Committee.
Mobile Version