A senior official has called for the introduction of new indices capable of better reflecting movements on the country's stock markets.

"Existing indexes haven't succeeded in showing exactly what is happening on stock markets", said Nguyen Son, head of Market Development Department of the State Securities Commission (SSC).

Speaking to reporters, Son suggested instead Vietnam develop new index systems based on the top 30 or top 50 large-cap companies, or divided into business sectors.

As evidence of this need, the official cited stock market sessions where 80 percent of stocks listed on the VN-Index and HNX-Index fell but both markets rose on the back of blue chip performance.

Son went on to explain that current indices are calculated on the basis of outstanding stocks, rather than free float volume.

This method is accurate for international markets where the amount of free float shares is the outstanding volume, said the official.

But Son said that many listed companies in Vietnam were transferred from State-owned enterprises and stakes held by the State cannot be traded freely on the markets.

Son then gave Vietcombank as an example. Listed in 2009, Vietcombank now sees 163.2 million shares traded on the HCM Stock Exchange while the real outstanding volume is over 1.7 billion shares.

The remaining 1.6 billion shares are currently held by the State.

Son said, however, that Vietcombank's upcoming listing of these 1.6 billion shares on the HCM Stock Exchange will not help. Rather, it will increase the outstanding volume while retaining the free float. This in turn will affect the calculation on VN-Index, then distort it.

"This is why index calculations have to be revised."

Earlier, the SSC urged both the HCM City and Hanoi stock exchanges to research possible new indices development and to revise the calculation of existing indices.

"This revision is essential, but it doesn't mean discarding current indices because these provide an important reference point," Son concluded./.