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Seminar proposes measures to stabilise stock market
A seminar conducted by the State Securities Commission last week developed six measures for developing the nation’s stock market, aimed at stabilising the market and shoring up investor sentiment in the short term, and restructuring the market in the long term.
The measures developed by seminar participants were: (1) to continue to equitise State-owned enterprises to spur innovation, add higher quality shares to the stock market and lure investment; (2) to enhance banks’ financial capacity and increase sources of foreign capital by allowing domestic banks to sell stakes of up to 5 per cent to foreign banks without permission from the State Bank of Viet Nam, and by raising the cap of foreign holdings in domestic banks from the current 30 per cent to 35 per cent; (3) to delay the new personal income taxes on dividends and capital gains from securities investment for one to two years; (4) to establish a market stabilisation fund with capital contributions from both the Government and domestic and international institutions; (5) to intensify the roles of the professional associations of brokers, auditors and investors as well as clubs of listed companies and fund management firms in enhancing professional ethics, supervising required disclosures, and developing market infrastructure; and (6) to apply a common foreign ownership rate of 49 per cent for both listed and unlisted public companies.
Foreign institutional and individuals holdings in domestic listed companies and listed investment funds are now subject to a cap of 49 per cent, under Government Decision No 238/2005/QD-TTg, but no such cap has been stipulated for unlisted firms.
Nguyen Thanh Ky, general secretary of the Viet Nam Association of Securities Businesses, told the seminar:"The Government should abolish the personal income taxes on securities investment for three to five years to stimulate market growth and use the revenue from such taxes to regulate the market when it rallies and becomes overheated."
Urging the establishment of a market stabilisation fund, Tran Thanh Tan, chairman of the Viet Nam Fund Management Club, said, "The most important thing to stabilise the market now is to take measures to encourage investor sentiment. A market stabilisation fund, just like a breakwater, would help consolidate investor confidence in the face of market fluctuations."
He said his club was willing to take part in setting up such a fund, which could operatate independently on a not-for-profit basis.
Tran Dinh Cuong, general director of Ernst & Young Viet Nam, said investor confidence came not only from regulations but from the way firms acted.
"Companies need to attach greater importance to releasing transparent, exact and timely information," Cuong said. "That’s their responsibility not only to investors but also to themselves to develop stably and sustainably."
He urged the Ministry of Finance and the State Securities Commission to review regulations on financial accounting and auditing for consistency with international practice and standards.
State Securities Commission chairman Vu Bang vowed that enhancing the quality of required disclosure would be one of the commission’s priorities this year.
"The commission is urgently working on tightening regulations on making and auditing financial reports; and intensifying inspection and punishment for violators," Bang said.
VietNamNet/VNS
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