MoF flags merger as part of stock market restructuring.
The merging of Vietnam’s two stock exchanges in the near future has been raised by the Ministry of Finance as a measure within the stock market’s restructuring process. The idea was spoken of by Deputy Minister of Finance Tran Xuan Ha at a regular press conference on March 2.
The solution was based on guidance from the Prime Minister at the Hanoi Stock Exchange on the first session after the Tet holiday, with the Minister of Finance and the Office of the Government conducting the PM’s development orientation for the stock market in 2015 and subsequent years, according to Deputy Minister Ha.
In particular, the restructuring of stocks and securities in the market must be associated with the restructuring of bonds and the derivatives transaction system.
The merger of the two stock exchanges to become the Vietnam Stock Exchange will be implemented shortly and will lead a reorganization of transaction systems, to enhance management and bolster transparency.
The restructuring of the investor base in the market, following the development of organizational investors such as insurers, investment funds, and voluntary pension funds, aims to create a concrete foundation for market operations. Furthermore, Deputy Minister Ha indicated a reorganization of securities companies and fund management companies to improve their financial and management capacity, with the number of securities companies being cut from 100 to 80 within two years.
Other important solutions during the restructuring process are State-owned enterprise (SOE) equitizations and their divestment from companies outside of their main business field.
Regarding the ceiling on foreign investors, Deputy Minister Ha said that Circular No. 58 allows foreign investors own 100 per cent of securities companies and fund management companies, in accordance with Vietnam’s WTO commitment. Listed companies will be grouped differently, with groups where foreign investors are not allowed to participate. Remaining groups can expand the participation of foreign investors in the stock market.