The stock market capitalisation value will reach 50% of GDP by 2010 and 70% of GDP by 2020, according to the project on capital market development.
Prime Minister Nguyen Tan Dung has approved the project on developing Vietnam’s capital market by 2010 with the vision towards 2020, under which the stock capitalisation value will reach 70% by 2020.
The aim is to develop a diversified capital market in order to meet the demand for capital of the national economy.
Under the newly approved project, the stock market will play the decisive role in making the capital market become an important part of Vietnam’s financial market. By 2020, Vietnam’s capital market needs to have a development level equal to other markets in the region.
The capital market needs to be fully worked-out in structure, comprising the share market, bond market, derivatives markets, official and OTC markets, and operate under the best internationally standardised rules. Vietnam’s capital market, as a developed market, will also have the capability to link with regional and international markets.
In the immediate time, Vietnam will gather forces on developing the scale and perfecting the structure of the capital market, improve the quality of and diversify commodities of the market, including types of bonds. Moreover, Vietnam will also focus on developing derivative products like options or forward contracts.
The government will push up the equitisation of state-owned big general corporations, economic groups, and state-owned banks, associate the equitisation with IPO and listing on the bourse. The state will sell more shares in enterprises in which the state does not need to hold controlling stakes. Foreign invested enterprises, which are now operating as limited companies, will shift to operate as joint stock companies which list their shares on the stock market.
The intermediary institutions and market service providers will see considerable development in the number and quality of services (securities companies, investment fund management companies), while a market of credit rating will gradually take shape in Vietnam.
Vietnam plans to allow the establishment of credit rating firms that can meet requirements, and allow several prestigious foreign institutions to operate in Vietnam.
Vietnam will fulfill its commitments on market opening by allowing professional investors to enter Vietnam under the committed roadmap. In the future, Vietnam Social Insurance and Post Savings will be allowed to make investment in the capital market. Vietnam encourages foreign based investment funds to make long-term investment in Vietnam.
Source: VNE
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