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Officials fast-track market restructure
Key stock indices have plunged by up to 45 per cent since earlier this year, so securities regulators have pledged to roll out this month an urgently awaited plan to restructure the market.
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| Clients make deposits at a BIDV branch in Hung Yen Province. Equitising State-owned enterprises is part of the securities market reform plan |
The Viet Nam Association of Securities Business has already proposed its own measures to merge the two national stock exchanges in Ha Noi and HCM City, but it has taken a prolonged market downturn and a wholesale loss of faith in the market by investors to inspire the State Securities Commission to include the concept in its restructuring plans.
Merging the two exchanges was an idea that had been kicked around before, but it would bring a lot of benefits to the market, especially in forming a comprehensive technology plarform, HCM City Stock Exchange board member Le Hai Tra told Viet Nam News by telephone.
"If the merger is critical, the system can be ready," Tra said.
Another association proposal being considered by the SSC is to establish a consistent format for the websites of listed firms, ensuring the transparency of their operations.
The commission also plans to get tougher on securities companies, a number of which have been exposed as nearly insolvent in recent weeks – particularly SME Securities Co, which was ordered to suspend brokerage operations. Restructuring securities companies has therefore become a top concern for the commission.
"Beginning April next year, we will classify securities firms based on their operations and the quantity of firms will be reduced," said commission vice chairman Nguyen Doan Hung.
Association chairman Le Van Chau has also asked that securities companies be divided into firms that offer brokerage services and those that manage investments and perform other services. However, it would be difficult to carry out such a proposal as the current model helped securities firms use the profitable operations from one line of business to cover losses in another, commented an official from Vietinbank Securities Co who asked to remain anonymous.
Chau also urged officials to designate the State Bank of Viet Nam as the securities settlement bank instead of the Bank for Investment and Development of Viet Nam (BIDV).
"This is the optimal method, and one that many countries have applied, since the central bank is the settlement centre for the economy," he said.
But Hung said the commission had already consulted with the central bank on this proposal and rejected it. "We are considering the Viet Nam Securities Depository instead," he said.
Chau has also proposed that the State Securities Commission be given regulatory authority independent from the Ministry of Finance. "The commission needs the authority to decide on issues related to the market in order to deal with upheavals in a timely manner."
BIDV, meanwhile, has formally begun the process of its initial public offering, while the IPOs of 27 other major State-owned enterprises have been delayed until 2015-20, including those of PetroVietnam Group, Electricity Viet Nam (EVN) and the Viet Nam National Coal, Mineral Industries (Vinacomin) Group.
The deputy head of the Government Office, Pham Viet Muon, who is also vice chairman of the Steering Committee for Business Renovation and Development, said the Government would begin gathering equitision proposals from ministries in the first quarter of next year. The equitisation of State-owned enterprises over the past 10 years has boosted the securities market.
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