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SCIC’s share purchases not intended to rescue specific company
Le Song Lai, Deputy General Director of the State Capital Investment Corporation (SCIC), said that SCIC will following a transparent and strict procedure in buying shares, and that the corporation’s purchase does not aim to rescue any specific share item or company.
Some experts have doubts about the ability of SCIC, saying that SCIC is not as financially capable of buying shares as it says. SCIC does not even have VND15tril in chartered capital yet. What would you say about the comment?
It is really a difficult question to answer about how much capital is needed now to help recover the market, since this figure always changes, depending on the market’s performance and investors’ feelings.
However, with the happenings in the market in the two trading sessions of this week, I think that the sum of money needed to help stabilise the market is not that big and beyond the government’s financial capability.
Which criteria will SCIC consider to buy shares and what will SCIC do to ensure that wrongdoings will not happen?
SCIC will only buy good share items with high liquidity. Besides, as SCIC aims to support the market, it will buy the share items which can make positive impacts on the market’s performance and ensure the operation efficiency of SCIC.
I have to emphasise that the investment portfolio, trading volume, share prices and the time to buy shares will be decided by SCIC after considering the market’s performance. The ask-and-grant mechanism cannot exist in SCIC’s share purchases, and SCIC will not spend money to rescue a specific company or investor.
The detailed information about SCIC’s trading deals will be announced at suitable moments in order to minimise bad impacts on the market and avoid insider trading, which can harm the benefits of investors.
What kinds of information will be kept secret, then?
Five kinds of information: 1. the total sum of money SCIC will use to buy shares 2. the names of share items SCIC will buy 3. the prices at which SCIC will buy shares 4. the time SCIC plans to buy shares and 5. the proportion of every share item to be bought.
There was a rumour last week that SCIC drew up a list of 20 share items at the Hanoi Securities Trading Centre (HASTC) and 20 other items on HCM City Stock Exchange to buy, and that SCIC may spend VND5tril to rescue the stock market. I can say that all that information is false.
Will SCIC have to request instructions from higher levels, while the market changes every day and every hour?
A taskforce in charge of regulating the stock market has been set up, comprising representatives of the SCIC, State Securities Commission and relevant ministries. The taskforce has full power to make investment decisions; it does not have to ask for instructions from other agencies.
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