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Stock market urged to restructure
The securities market must be restructured to become more modern and professional if it is to continue to develop, says Minister of Finance Vu Van Ninh, setting a goal of total market capitalisation at 50-100 per cent of gross domestic product (GDP).
The security of the market needed to be increased over the next decade along with the competitiveness of intermediary institutions and the capacity of official watchdogs and law enforcement, Ninh said. Information technology applied to transactions and market management must also be modernised, he said.
With higher quality and more diverse products leading to greater liquidity, the stock market would become a major channel for generating capital for economic growth, Ninh said.
Stock market capitalisation has jumped from VND986 billion (US$51.9 million) at the end of the market's first year of operation in 2000 – equal to 0.28 per cent of GDP – to VND695.2 trillion ($36.6 billion) now – equivalent to 42 per cent of GDP, according to the State Securities Commission.
Average market transaction value has increased from VND1.4 billion per session in the first year of operation in 2000, to VND3.3 trillion per session currently, the commission said.
The market has developed in quantity and quality, said commission chairman Vu Bang, growing from 3,000 investor accounts in 2000 to 926,000 currently, while investor knowledge of securities has also improved.
The domestic stock markets have attracted US$7 billion in foreign indirect investment, helping stabilise foreign exchange rates, he added.
The number of intermediary organisations on the market has increased from seven securities companies and one fund management company in 2000 to 105 securities firms and 46 fund management companies now.
"After 10 years of development, most investors and financial institutions have developed stably and firmly. The staff and managers of the stock market are skilled and professional guys," said Securities Trading Association general secretary Nguyen Thanh Ky. "But the market would develop further if transparency were improved and financial reporting more timely."
Investors need a basis for lucid and professional decision-making in their trading, he said.
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