Chairwoman of the State Securities Commission (SSC) Vu Thi Chan Phuong discussed the important orientations and solutions of the management agency to support the Vietnamese stock market to develop more stably, with liquidity, transparency, quality, and sustainability in 2024.
Chairwoman of the State Securities Commission (SSC) Vu Thi Chan Phuong discussed the important orientations and solutions of the management agency to support the development of the Vietnamese stock market.
On the sidelines of the Gong Ceremony to open the first trading session of the Year of the Dragon 2024 at the Ho Chi Minh City Stock Exchange (HOSE), Chairwoman of the State Securities Commission Vu Thi Chan Phuong had an exchange with the press about the development orientation of the stock market in 2024.
Make the best effort to achieve the upgrade goal
+ The work of upgrading the stock market from frontier to emerging is highly anticipated by the Government and investors in the coming time. Could you please provide more information on this issue?
Ms. Vu Thi Chan Phuong: Upgrading the stock market is a common policy and has been directed by the Government and the Prime Minister in recent times. This content has also been stated in Resolution No. 86/NQ-CP dated July 11, 2022 of the Government and included in the Stock Market Development Strategy to 2030 approved by the Prime Minister. Most recently, in Directive No. 06/CT-TTg dated February 15, 2024, the Prime Minister also requested the Ministry of Finance to preside over and coordinate with the State Bank and the Ministry of Planning and Investment to promptly resolve problems in their respective fields to meet the criteria for upgrading the stock market from a frontier market to an emerging market.
In recent times, the management agency has made great efforts to implement many solutions to complete the important criteria set forth by international rating organizations. Accordingly, the State Securities Commission has organized many meetings with ministries and branches; at the same time, organized meetings and worked with international rating organizations, major international financial institutions and market members at home and abroad to jointly study and propose solutions to remove the remaining issues in the upgrading of the Vietnamese stock market.
According to the assessment of major international rating agencies and financial institutions, Vietnam has made many improvements and achieved many important criteria. However, there are currently two key groups of issues that need to be focused on improving and having measures to resolve in order to facilitate foreign investors to participate in the stock market in the coming time, which are the requirement for pre-transaction deposit (prefunding) and foreign ownership limit. These issues all require practical coordination of relevant ministries and branches to resolve.
In parallel with perfecting the main criteria of international rating organizations, we continue to perfect domestic regulations based on research on international regulations and practices to promote sustainable development of Vietnam's stock market, creating a favorable environment to attract international investors and foreign indirect investment flows.
We must affirm that upgrading the stock market depends on the objective assessment of international rating organizations through the practical experience of foreign investors. Therefore, under the attention and direction of the Government and the Prime Minister , in addition to the highest efforts of the management agencies, to bring about the expected results, the participation and determination of relevant ministries and branches are needed.
In addition, the upgrade also depends on the practical experience of foreign investors when participating in the Vietnamese stock market, so it is necessary to have the joint efforts of market members in providing services, listed companies, especially large listed organizations in the issue of transparent information disclosure, information disclosure in English, corporate governance according to good practices...
+ Connecting foreign indirect investment capital flows is one of the important activities that the Ministry of Finance and the State Securities Commission have paid great attention to and successfully implemented for many years. To continue that success, what plans does the management agency have in 2024?
Ms. Vu Thi Chan Phuong: Indirect investment promotion programs abroad are one of the annual activities, which have been implemented since 2014. Investment promotion programs have contributed significantly to promoting the potential of Vietnam's stock market to the international investment community, helping to stimulate demand and open up indirect investment capital sources into Vietnam's stock market.
After 3 years of interruption due to the COVID-19 pandemic, in 2023, the SSC continued to implement investment promotion programs in various forms, especially contact and dialogue programs with investors integrated within the framework of overseas working programs of the leaders of the Ministry of Finance and the SSC. Indirect investment promotion programs abroad in Europe, Hong Kong (China) and the US in 2023 all showed the interest and active participation of the investor community in the host country, including large financial institutions, investment funds and businesses that are looking to expand their business market to Vietnam.
In 2024, based on the experience and positive results achieved in previous years, under the direction of the Ministry of Finance, the State Securities Commission will continue to develop indirect investment promotion programs abroad to promote and attract more foreign capital to participate in the Vietnamese stock market; at the same time, strengthen connections, build and consolidate cooperative relationships with stock market management agencies, institutions, and large financial and investment organizations in the world. In the immediate future, it is expected that in March, under the direction of the Ministry of Finance, the State Securities Commission will coordinate with functional units under the Ministry to develop an Investment Promotion Program in Korea and Japan, with the Minister of Finance as the head of the working group.
Deputy Minister Nguyen Duc Chi (5th from left) beats the gong to open the stock exchange trading in the spring of Giap Thin 2024.
Prioritize solutions for transparent market development
+So what are the major orientations and important solutions to support the Vietnamese stock market to develop more stably, safely, liquidly and with better quality in 2024, madam?
Ms. Vu Thi Chan Phuong: In 2024, in the spirit of "Solidarity - Proactiveness - Innovation - Resoluteness - Efficiency", closely following the tasks and solutions for directing and operating socio-economic development of the Government and the Ministry of Finance, we believe that with the efforts, joint efforts and consensus of all cadres, civil servants, public employees, employees of the Securities industry, market members, the business community, investors, the close coordination of relevant agencies, press agencies... Vietnam's stock market will have more positive and strong changes, continue to be an attractive destination for domestic and foreign investment capital, an important medium and long-term capital channel for the economy, making an increasingly greater contribution to the country's socio-economic development in the new period.
In 2024, there will be many intertwined opportunities and challenges for the Vietnamese stock market. In that context, to develop a safe and sustainable stock market, an effective medium- and long-term capital mobilization channel for the economy, the State Securities Commission will continue to implement many groups of synchronous and specific solutions.
In the immediate future, with the approval of the leaders of the Ministry of Finance, the State Securities Commission is urgently preparing for the 2024 Stock Market Development Conference, which is expected to have the participation and direction of Government leaders, the participation and sharing of opinions of representatives of ministries, branches, international financial institutions, listed enterprises and market members.
For regular solutions in 2024, the management agency will continue to perfect the legal framework and policy system for market development, focusing on completing the development of a plan to effectively implement the Stock Market Development Strategy project to 2030.
At the same time, the State Securities Commission will strengthen the construction of infrastructure systems, apply information technology, and meet the trend of the 4.0 technology revolution, both creating conditions for management and operation, and creating favorable conditions for businesses, market institutions, and investors to participate.
Along with that, we will continue to restructure the stock market based on the main pillars that have been set out, focusing on strengthening the management of securities trading organizations and securities practitioners; diversifying the investor base, developing the institutional investor system, encouraging long-term foreign investment, and training individual investors.
In addition, to ensure market discipline, the management agency will strengthen inspection, examination and supervision to ensure the stock market develops sustainably, openly, transparently, and promptly and strictly handles violations of the law on the stock market.
In addition, as shared, we will promote foreign affairs and international cooperation, organize investment promotion programs abroad, work with foreign investors and rating organizations so that Vietnam's stock market will soon be upgraded. On the other hand, we will focus on preparing for the Conference of Securities Commissions of the Asia-Pacific Sub-region to take place in Vietnam in 2025.
Thank you very much!
In the stock market, the VN-Index as of December 29, 2023 increased by 12.2% compared to the end of 2022 at 1,129.93 points with increasingly improved liquidity. Listing and trading registration activities also had positive changes with the listing value and trading registration accounting for about 22.4% of estimated GDP in 2022 (20.8% of estimated GDP in 2023), up 7.3% compared to the end of 2022. In 2023, the market capitalization of stocks on the three exchanges HOSE, HNX and UPCoM reached VND 5,937 trillion, up 13.6% compared to the end of 2022, equivalent to 58.1% of GDP in 2023 (62.4% of estimated GDP in 2022).
The government bond market also recorded positive results when the value of listed bonds as of the end of December 2023 increased by 16.5% compared to the end of 2022, accounting for 21.3% of estimated GDP in 2022 (19.9% of estimated GDP in 2023). In addition, after a period of urgent preparation, the private corporate bond trading system (TPDNRL) has officially operated since July 19, 2023. The launch of this market will help management agencies, market members, and the investing public have more information about the TPDNRL market from primary to secondary, contributing to promoting the market to develop more transparently and sustainably.
In the context of many fluctuations in the underlying market, the derivatives market continues to play its role as a risk hedging tool for investors. Liquidity remains quite good, with an average trading volume in 2023 reaching 235,300 contracts/session.
Source: VGP
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