Traders work at the trading floor of Sai Gon Securities Inc. (Photo: VNA) Hanoi (VNS/VNA) - The development of the equity market will help promote thetransparency and corporate governance of listed companies, especially publiccompanies with State capital, an official has said.
The statement was made by Dang Quyet Tien, director of the finance ministry'sCorporate Finance Department, during a recent seminar in Hanoi.
“This will help boost the volume of transactions in the stock market,increasing the liquidity for State shareholders,” Tien said.
“There is a problem that has persisted for many years in most State-ownedenterprises, which is the ineffectiveness in the management and use of Statecapital,” he said.
“The development of the equity market would help State-owned enterprises beless dependent on bank credit loans, diversifying forms of capitalmobilisation.”
The Vietnamese stock market has seen remarkable development since itsinception, but the rate of capital mobilisation via this market was still verylow, said Nguyen Tu Anh, director of the General Economic Department under theCentral Economic Committee.
“The diversification of products on the market is still poor, resulting in highvolatility. At present, idle capital in the economy is quite large, the depositinterest rates of banks have decreased and the interest rates of Governmentbonds have dropped deeply, which are very favourable conditions to develop thestock market,” he said.
“Over the past 20 years, Vietnam’s stock market has made great progress,promoting its role as a capital mobilisation channel for the medium and longterm. However, more efforts are still needed to achieve the upcomingdevelopment goals,” said Ta Thanh Binh, Director of Securities MarketDevelopment Department under the State Securities Commission.
“The status upgrade of the stock market needs efforts not only from thesecurities industry and the stock market regulators but also from thepublic enterprises themselves. This will be achieved only when the businessesprove their transparency, complying with the discipline of information disclosure,following international accounting standards (IFRS),” she said.
The new era required efforts to improve corporate governance, theprofessionalism of the investor community and the ability of regulators tooperate the market, said Can Van Luc, senior advisor of the Bank for Investmentand Development of Vietnam (BIDV).
“People and technology are two decisive elements for the future development of Vietnam’scapital market,” he said.
Before the inception of the stock market, businesses were totally dependent onbanks regarding capital, said Nguyen Duc Hau, Deputy General Director of HAPACOGroup, the first enterprise in the north listed on the stock market of Vietnam.
“Since the opening of the stock market, HAPACO and many other businesses haveraised hundreds of trillion Vietnamese dong from public investors, therebyexpanding investment, having new shareholders, partners and wide-scalemarkets,” he said.
“We began as a small company, with equity capital of only 10.8 billion VND atthe time of equitisation, but now HAPACO has an equity of more than 1 trillionVND,” he said.
“The 4.0 era will change the way that investment banks, securities companiesand investment funds interact with customers,” said Pham Tien Dung, ResearchDirector of Bao Viet Securities Joint Stock Company.
“Robots will do a lot of computing work instead of humans in the future. Therise of automation in the financial industry has changed the speed and form ofthe stock market,” Dung said.
“The segments of retirement insurance, health insurance and property managementwill witness a great development in Vietnam’s capital market in the newdecade,” he said.
After more than 20 years of establishment, the structure of the capital markethas been clearly shaped, consisting of two main components, namely the stockmarket and the medium and long-term credit market.
In 2000, the market capitalisation of the stock market was only 986 billion VND,equivalent to 0.28 percent of GDP, and after two decades, its capitalisationhas soared to an equivalent to 83 percent of GDP./.
VNA
