At 7-year mark, stock market on right track

The stock market has been developing on the right track, especially in the last few years, when the market has witnessed great advances in development.

According to the State Securities Commission (SSC), by the end of June 2007, 243,809 transaction accounts had been opened, up by 2.3 times compared to December 2006 (106.393), including 242,624 accounts of individual investors and 1,185 accounts of institutional investors.

With open regulations released recently foreign investors have more opportunities to join the market. Now foreign investors can hold up to 49% of total listed shares. Foreign securities trading institutions are allowed to make capital contributions and buy shares of up to 49% of chartered capital to form joint ventures. Foreign investors can hold up to 30% of local banks’ shares.

To date, foreign investors have opened 5,568 transaction accounts (5,353 individual accounts and 215 institutional accounts). Some 260 foreign investment funds are injecting money in Vietnam’s stocks with the total estimated value of investment portfolio reaching $5bil. The accounts opened by Japanese investors account for 70% of total foreign investors’ accounts.

The proportion of shares held by foreign investors in big local companies, such as ACB, STB, BT6, or AGF, has nearly hit the ceiling. Officials from the Market Development Division under SSC said that if Vietnam could offer high-quality commodities it could attract a huge quantity of capital from the outside, which will help stimulate the national economy.

The most important tasks for SSC in the time to come are to stimulate demand, build and make public the roadmap on market opening to foreign investors. The regulation on foreign ownership in conditional investment fields must come in line with the regulations stipulated in the Investment Law and in international treaties of which Vietnam is a member.

On August 8, 2007, in HCM City, there will be the ceremony announcing the Prime Minister’s decision on shifting the HCM City Securities Trading Centre (HSTC) into the HCM City Stock Exchange (HOSE).

According to Decision No 599 dated May 11, 2007, HOSE is a state-owned legal entity, operating under the mode of a one-member limited company, and is covered by the Securities Law, Enterprise Law, the regulations for the stock exchange and other related laws.

HOSE has the total chartered capital of VND1tril ($62.5mil), sourced from the initially allocated capital by the state to HSTC now transferred to HOSE, the additional capital to be provided by the state during the operation, the additional capital from post-tax profit, and other legal sources.

Source: VNE