Turning the stock market into main medium and long-term capital channel

Two investors looking at a stock trading board on a laptop. — Photo vneconomy.vn

After 25 years of development, the Vietnamese stock market is playing a more important role in attracting capital, supporting the commercial banking system. Therefore the target is to turn the market into the main channel of medium and long-term capital for the economy.

At the seminar “The stock market: Releasing resources for businesses, profitable investment channels and assets" launched by Báo Đầu tư (Investment Newspaper) on November 18, Nguyễn Đức Chi, Deputy Minister of Finance, said that the ministry is working with other ministries to report to the Government and the Prime Minister on the development strategy of the country’s stock market to 2030, with an outlook to 2045.

The fundamental factors for creating the strategy are based on the country's socio-economic development, the Party's orientations and resolutions, and the Party's guidelines and policies.

The general target is to build and develop the stock market into the main medium and long-term capital channel for the economy, Chi said. The 25 years of development show that the stock market is playing a more crucial role in attracting capital, supporting the commercial banking system.

In the past, before the establishment of the stock market, the short, medium and long-term capital channels were banks’ responsibility. Now the stock market accounts for a larger proportion in the capital channel.

The perspective of market development should refer to synchronous and unified development of the financial market, associated with innovation in the growth model and economic structure and linking with the global market and economy.

In addition, it has to be developed on the basis of technology and requirements of digital transformation.

"The stock market needs to link with the regional stock market, integrate with the international stock market, and apply the right international practices and standards to develop the Vietnamese stock market," Chi added.

The stock market will develop in depth and market quality and liquidity, with the target of reaching at least 85 per cent of GDP (adjusted) by 2025, and 110 per cent of GDP in 2030.

For bonds, it aims for 47 per cent of GDP in 2025 and 58 per cent of GDP in 2030, with a reasonable structure of stocks, corporate bonds and government bonds.

Regarding the derivatives market, the target is achieving a growth rate of 20-30 per cent/year, with the number of investors reaching 5 per cent of the population by 2025 and 8 per cent in 2030.

To organise the market effectively, the Việt Nam Stock Exchange will be established, restructuring the model of parent and subsidiary companies. The Prime Minister and the Ministry of Finance have reached a consensus on preparing for the model of the Việt Nam Stock Exchange to go online as soon as possible.

In addition, the Việt Nam Securities Depository Center will be reorganised and changed to the Securities Depository and Clearing Corporation, synchronising securities trading and payment technology, and aiming to upgrade the market under MSCI’s and FTSE’s standards before 2025. — VNS