Vietnam is synchronously developing its capital market, in which the local stock market plays a principal role, so that it will be equal to capital markets in regional countries by 2020, Vietnamese finance officials said Friday.
"Vietnam is striving to increase its stock market capitalization to gross domestic product (GDP) ratio to 50 percent in 2010 and 70 percent in 2020 from over 30 percent currently," Truong Hung Long, vice director of the Department of Banking and Financial Institutions under the Finance Ministry, said at an ongoing international conference and an exhibition named Vietnam ICT (Information and Communication Technology) in Finance 2007.
Among long-term solutions to the capital market development, Vietnam will strongly foster capital supplying channels. Specifically, the country is facilitating its insurance market and encouraging insurers to intensify investment in the capital market, developing social insurance, community retirement funds and savings services of the local posts sector, luring more foreign investment, and beefing up banking services to assist the capital market.
To attract greater foreign investment, Vietnam is opening wider doors for foreign investors to pour money into different industries in line with its international economic integration roadmap. The country is also facilitating foreign indirect investment and creating more favorable conditions for overseas Vietnamese to remit money home for business.
To step up the local bourse, Vietnam will "separate the bond market from the share market by 2010, and center on improving the Ho Chi Minh City Stock Exchange and turning the Hanoi Securities Trading Center into the over-the-counter market," Long said.
The proportion of bonds, mainly government bonds, in the stock market will be 70 percent, and that of share 30 percent by 2010, he said, noting that the bond proportion will decrease by 2020.
At the Vietnam ICT in Finance 2007 held from Sept. 20-21 by the Department of Financial Informatics and Statistics Department under the Finance Ministry and International Data Group, the world 's leading technology media, events and research company, Nguyen Thi Lien Hoa, vice chairwoman of the country's State Securities Commission, said Vietnam will, by 2010, "develop the local bourse in terms of scale and quality with a focus on fostering the bond market, mainly the government bond market."
Vietnam is encouraging institutional investors and professional investment institutions such as banks, insurance companies and investment funds to participate in the market, constructing and announcing opening-up roadmaps for foreign investors in line with the country's Investment Law and its World Trade Organization commitments, and "developing products which connect the insurance and the real estate markets with the capital market," she stated.
Vietnam's stock market index, VN-Index, on Sept. 23 stood at 958.67 points, compared with the starting point of 100 in July 2000 when the bourse was established with only two kinds of listed shares totaling 270 billion Vietnamese dong (VND) (nearly 16.88 million U.S. dollars).
By July 31, 2007, Vietnam had 197 companies having their shares either listed or registered for transactions at the Ho Chi Minh City Stock Exchange and the Hanoi Securities Trading Center, with total value of 276.80 trillion VND (17.30 billion dollars) or 28.4 percent of the country's GDP in 2006, Hoa said.
By the end of July, Vietnam also housed 557 kinds of bonds, mainly government bonds, with a total value of 113.65 trillion VND (7.10 billion dollars) or 11.67 percent of the GDP. By that time, it had some 224 stock investors, 8.5 times the figure in late 2005, she said. Of the stock investors, nearly 5,570 are foreign ones, including such international investors as JP Morgan, Merrill Lynch and Citygroup.
As of 31 July, 2007, Vietnam had 59 securities companies, 18 fund management firms, and six banks, and 67 securities depository centers, she said, noting that total chartered capital of the securities firms were nearly 4.49 trillion VND (280.63 million dollars).
Source: Xinhua
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