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Foreign strategic partners’ shares plan mulled
The Government is considering a proposal by the State Securities Commission (SSC) to allow foreign strategic partners to use non-dong currencies, such as the US dollar, to buy shares, in an effort to stimulate development of the stock market.
Nguyen Son, head of the Stock Market Development Department under the SSC, said in an interview with the English-language daily Viet Nam News on February 22 that he expected the recommendation to be quickly approved, along with other proposals made by the commission on February 21.
“I think this measure will help reduce demand for the Vietnamese dong in the stock market when local commercial banks are short of dong,” Son said.
He added that the commission’s proposal would only apply to foreign strategic partners as “they are regulated to hold stakes in enterprises for at least three years.”
As a result, “their investments will contribute to stabilising the market in long term,” Son said, adding that if individual foreign investors were allowed to pay for shares with US dollars it would dollarise the local economy.
However, Ngo Minh Duc, an analyst at EuroCapital Securities, said that this measure could not help the exchange overcome the hard time right now.
“The measure should have been implemented long ago. Proposing it now seems so late. It sounds like a band-aid solution,” Duc said.
However, Son said “It is incidental that the commission stated out the solution at the time the market’s gone bad.”
“Our job is for long-term development, not just day-to-day. It’s about a well-run exchange, not about providing miracle cures,” said Son.
Vo Tri Thanh, a senior economist at the Central Institute for Economic Management, said economic policy makers should not attempt to please everyone but focus on general economic principles.
VNA
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