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State investment arm to set up share buying account: chairman
The State Capital Investment Corporation (SCIC), the government’s investment arm, will set up a separate account to buy shares to support the troubled VN-Index, its chairman told local reporters last week.
In an effort to stop the freefall of the benchmark index, which has dropped 45 percent this year, the government ordered the SCIC to buy shares on March 5, according to Finance Minister and SCIC Chairman Vu Van Ninh.
The market remained gloomy and only showed signs of rebound after the market regulator began to cut the intra-day share trading band from 5 percent to 1 percent on Thursday, March 27.
In the interview on the sideline of the National Assembly’s Standing Committee hearing on Thursday, Ninh also discussed the stock market and inflation.
Investors are questioning whether the SCIC has really participated in the market. Could you explain?
Vu Van Ninh: The SCIC is keen to participate in the market but, actually, the plan of buying back shares is still only an intention, not a policy.
So we are hesitating.
In the next couple days, I will make a temporary document outlining the SCIC’s willingness to enter the market.
Then I will seek the prime minister’s approval to make the share buying plan an official policy.
The SCIC will set up a separate account to buy back shares.
The responsibility will fall to the government if it’s likely to incur losses.
How will the SCIC buy shares?
It depends how the market moves.
I have a feeling that local investors’ confidence is very fragile at the moment.
The government’s most important goal now is to curb inflation, so the central bank tightened monetary policies, which affected the stock market.
Foreign investors remained net buyers for many sessions because the Vietnamese market still attracts them.
The economy is beset by with some problems but they are just short-term.
I would buy shares heavily now if I had money.
The market regulator cut the intra-day trading band to 1 percent to halt the market slide, when will the 5 percent rate be reinstated?
This is an ad hoc measure. The 5 percent rate will be reinstated when the market becomes stable.
I believe the market will bounce back by the end of the year because our policies are on track.
Everything needs time. Financial policies don’t deliver results one day after they are announced.
Thanhnien
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