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US financial crisis playing mind games with investors: SSC
Vu Bang, Chairman of the State Securities Commission (SSC), affirmed that the US financial crisis has been indirectly affecting Vietnam’s stock market as it has been psychologically affecting investors.
Some experts have warned that Vietnam’s stock market will face a wave of investment capital shifting. What is your viewpoint about this?
With the information I have about foreign investors’ portfolios at this moment and foreign currency reserves, I can say that we are capable of dealing with sudden changes, if they occur, related to indirect investment capital movement.
Meanwhile, our conditions are now very good. The government has been patiently following the eight measures it drew up to stabilise the economy. Our foreign currency reserves have increased considerably. Besides, the oil price decreases in the world’s market have been supporting us.
But negative factors still exist?
We have anticipated difficulties and we are making plans to deal with them.
The first thing we need to do is to control the liquidity and manage risks of securities trading organisations in the market. We have been strengthening supervision over the market’s operations, while issuing strict risk management procedures.
Second, we have suggested to the government a plan on dealing with crises.
Third, we are reconsidering securities operations, including repo contracts, in order to prevent risks. SSC is going to release a legal document related to the issue.
As far as I know, a lot of applications for share issuance have been made to SSC. Do you think that it is now the right time for companies to issue securities?
When businesses find it difficult to access bank loans, they naturally seek capital in the stock market, which they hope can help them continue their projects. It is true that a lot of applications on share issuance have been sent to SSC.
We do not have the right to refuse the applications as the plans prove to meet legal requirements. However, I have to say that we cannot ensure the feasibility of the investment plans; we only can ensure that the companies can meet the requirements for the issuance.
However, we have recommended to companies which plan to issue shares that they think carefully about their plans, and have suitable plans for using capital. Companies should only mobilise capital to inject in effective projects in order to avoid so-called ‘share dilution’.
VNN
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