Five Urgent Solutions for Vietnam Stock Market

The solutions were presented at the Vietnam donors’ Consulting Group meeting, 2011.

Firstly, Vietnam needs to establish economic calendar to announce basic economic information, economic data, indexes such as CPI, unemployment rate, industrial inventory, property index, forex reserve, total outstanding loans and deposits which should be categorized into sectors, area, kinds of currencies and individuals or institutional, the proposal read.

The Ministry of Finance and the State Securities Commission (SSC) should regularly publicize FII, total securities trading accounts, total deposit in these accounts.

Secondly, Vietnam needs a PR strategy to advertize Vietnam stock market, makes efforts to enter MSCI Emerging Markets Index (a free float-adjusted market capitalization index created by Morgan Stanley Capital International (MSCI) that is designed to measure equity market performance in the global emerging markets), actively takes part in international conference, forum to present Vietnam economy and stock market potentials to international investors.

Thirdly, to attract foreign investors, Vietnam must immediately 1) simplify procedures to open securities trading account for foreigners, 2) innovate tax policy .

Fourthly, the country should speed up privatization process with new roadmaps and specific criteria as well as timeline to attract foreign  inflows. Equitization Steering Commission should be allowed to adjust IPO prices by 10% maximum and ensure IPO price higher than book value in the following auctions if the previous one was a failure due to high pricing. If IPO auction failed for a third straight time, the IPO company must be reevaluated.

Fifthly, Vietnam must define and clarify the role of State Capital Investment Corporation (SCIC) and SCIC must follow information disclosure regulation as a market member. SCIC currently is the biggest institutional investor in the market and market will be very sensitive to its moves.