Determine to soon upgrade Vietnam’s stock market

Vietnam's stock market is considered a positive growth market compared to other countries in the region and the world. Photo: Internet

Maintain growth in both scale and quality

In 2023, the total mobilized capital value from Vietnam's stock market saw a year-on-year increase of 33.5% to VND 418,271 billion. Along with the economic recovery, the VN-Index grew by 12.2% compared to the previous year, facilitating businesses to mobilize capital through the stock market. Production and business results of listed companies and large-scale public companies still faced difficult but showed signs of recovery in the last months of the year. Vietnam's stock market is considered a positive growth market compared to other countries in the region and the world.

Ms. Vu Thi Chan Phuong, Chairwoman of the State Securities Commission said that the positive results of the market in 2023 and the effective changes in macroeconomic growth, as well as the improved business results of enterprises, have boosted investor confidence in the early stages of 2024. In the opening session of Giap Thin Lunar New Year, the VN-Index officially surpassed the 1,200 point mark, expecting a more prosperous year for the Vietnam’s stock market in 2024.

The domestic stock market in 2024 is forecast to be better than 2023 thanks to the support of many positive factors. The Government has drastically directed ministries, sectors and localities to implement solutions to remove difficulties stabilize and promote economic growth. The more positive trend continues to be maintained in many sectors, thereby creating favourable conditions for operation of businesses to restore, facilitating Vietnam's stock market to maintain its stability, good liquidity, and growing in parallel with both scale and quality.

According to Ms. Nguyen Thi Mai Thanh, Chairwoman of the Board of Directors of Refrigeration Electrical Engineering Joint Stock Company (REE), investors always expect listed companies to have good growth and are willing to pour more capital for this goal. REE representatives proposed that listed companies are considered "goods" on the stock market, so that the goods must be authentic and not be fake goods. Ms. Mai also said that besides financial issues, technology or management capacity, the key matter of businesses and listed businesses is the stability of the legal framework. She proposed that the Government should continue to create a more open and transparent legal business environment, towards one-stop service, reducing the ask-give mechanism, and gradually shifting to a registration mechanism, and businesses are responsible for themselves within the legal framework.

Attracting foreign investors

Recommending solutions to promote the development of Vietnam's stock market, Minister-Counsellor, Korean Embassy to Vietnam emphasized solutions to expand Vietnam's stock market. Accordingly, it is necessary to diversify HOSE-listed stocks by changing the exchange of UpCOM-listed stocks, because 50% of UpCOM's capitalization belongs to the industrial goods and services, food and drinks sectors while the banking and real estate industries account for the majority of HoSE's capitalization.

He proposed to raise foreign ownership limit s to increase the supply of stocks for foreign investors, with depository certificates without voting rights to match with state management goals for each industry and occupation group; create favorable conditions for the listing of startups and FDI enterprises to improve market diversity.

The Minister-Counsellor said that it is necessary to encourage banks and insurance companies to invest in stocks, promoting diverse asset management strategies and high yields. In addition, it is necessary to introduce a people's share system to distribute shares of reputable state-owned enterprises at lower prices than those issued to the public, promoting the growth of assets of citizen.

At the same time, it needs to deploy a pension fund to encourage people who prepare for retirement through long-term investment plans. To attract foreign investment, it is necessary to raise foreign ownership limit s and provide equal rights for foreign investors; regularly organize investment promotion conferences to introduce reputable Vietnamese companies to foreign investors. At the same time, improve the trading system to safely handle various orders, including stocks, futures contracts and options with large volumes.

Mr. Dominic Scriven, Chairman of the Board of Directors of Dragon Capital Vietfund Management Joint Stock Company recommended that Vietnam needs to develop the infrastructure, platform, and ecosystem of the capital market, especially the network of investors in Vietnam. Besides, to control market fluctuations, the country should strengthen confidence of investors in the stock market. Mr. Dominic Scriven emphasized his support for upgrading Vietnam's stock market and hoped for the early launch of Vietnam's central clearing partner (CCP) model. He also said that it needs to research and promote the development of Vietnam's financial center and affirmed that this is a golden opportunity for Vietnam.

Proposing solutions to upgrade the stock market, Mr. Luu Trung Thai, Chairman of the Board of Directors of MB Bank, said that the quality of goods in the market is important. When the quality of goods on the market is good and the value is high, it will attract foreign investors to seek profits and investment opportunities in Vietnam.

Upgrading the stock market is a general policy and has been given attention and direction by the Government and the Prime Minister in recent times. This content was also stated in Resolution No. 86/NQ-CP dated July 11, 2022 of the Government and included in the Stock Market Development Strategy until 2030 approved by the Prime Minister. Recently, in Directive No. 06/CT-TTg dated February 15, 2024, the Prime Minister requested the Ministry of Finance to preside and coordinate with the State Bank and the Ministry of Planning and Investment to urgently handle problems to meet the criteria for upgrading the stock market from frontier market to emerging market.