The biggest problems of the Vietnamese stock market

Vu Bang, Chairman of the State Securities Commission (SSC), when reviewing the 7 years of the stock market, said that the biggest success in the last seven years was that the market had been developing on the right track with no crises, serving as the important capital channel for the national economy.


What have been the shortcomings of the stock market in its seven years of development?

First, the investment structure of the market has been unbalanced: the institutional investment proportion has been low.

Second, supply and demand have been unbalanced. Sometimes demand is too big while supply is too low.

Third, material facilities have not been able to keep up with development.

Moreover, there have been problems in the policies on the stock market’s management.


What will SSC do to settle the supply and demand imbalance?

There will be two big sources of supply of commodities from now to the year’s end, share auctions and offerings by public companies. As the State Securities Commission has calculated, the volume of shares to be offered is big. It is a right policy to bring more good commodities to the market; however, it is still necessary to consider the conditions of the market.

The equitisation process should be pushed up; however, it is necessary to draw up suitable plans for the IPOs of big corporations. SSC has issued a document giving suggestions related to the timing of IPOs. SSC plans to submit to the Ministry of Finance a draft mechanism, which would allow companies to delay their share issuance plans, though they have been licenced.

I think it is necessary to keep close watch over demand on the market. For example, there should not be policies that tighten the flow of foreign portfolio investment into Vietnam at this moment.


Let’s talk about management and supervision capability. There have been many violations related to information exposure. What do we do to deal with the problem?

I have to admit that supervision and inspection capability is not good. It is partially because of the lack of staffs and the qualification of the staffs. Besides, penalties have proved to be not heavy enough to deter violators.

There are three things the committee needs to do to heighten supervision capability. 1. Setting up an independent supervision committee, which will supervise the operation of the market. 2. Focusing on training supervisors. The investigation requires qualified staffs. 3. Investing in a supervision system (which should be foreign-made).

Source: VNE