REVIEW
of
FINANCE -
Jan. 2018
31
has been developed in number and is now
efficiently and competitively restructured. Main
included: (i) Legal framework for the credit
rating agencies; (ii) Restructuring of securities
companies by reducing the number and
improving financial capability and operational
efficiency; (iii) The number of primary dealers
in Government bonds has increased, proving
their roles in both the primary and secondary
markets and in support of bond investors.
Optimistic prospects
of Vietnam stock market development
In the context of brighter world economy,
Vietnamese economy is exptected to see
continued growth with GDP of over 6.7%
in 2017 and maintain in the next five years,
while inflation is under control, the exchange
rate is relatively stable and the interest rateis
maintained at a reasonable level. The view
on Vietnam’s development is transforming,
formally recognizing the private sector and
private economic development as key pillars
for socio-economic development. This is a
very fundamental condition for the continued
development of the capital market in the coming
time.
In addition, under the guidance of the
Government and the Ministry of Finance,
together with management and administration
policies of the State Securities Commission and
the efforts of market participants, the confidence
in the continued development of Vietnam stock
market is based on the following factors:
Firstly,
the policy of promoting equitization
and divestment will provide many quality goods
for the market. In the first nine months of 2017,
the Government successfully privatized 34 of
44 planned SOEs. According to the announced
Government plan, 82 more enterprises will be
equitized in the period 2018-2019, including
many large enterprises such as Vietnam
the formation and development of the bond
rating service, under which, eligible rating
agencies will be licensed by the Ministry
of Finance to support further bond market
development.
Thirdly,
the bond investor base has been
broadened and diversified to include more
longer term investors and foreign investors.
In order to develop the long-term investor
base, the Ministry of Finance has submitted
to the Government for issuance of investment
policy by the Social Security system to be more
professional; new policy on voluntary Pension
Plans as an additional social safety net measure
and a new long-term source of capital for
investment in Government bonds. In practice,
the Ministry of Finance undertakes regular
placement of 10 year Government bonds with
insurance companies. In 2016 and 2017, the
Ministry of Finance issuedVND 10,000 to foreign
investors being foreign insurance companies.
With regards to foreign ownership, the Ministry
of Finance has submitted to the Government for
issuance of Government Decree No. 60/2015/
ND-CP providing for the revision and addition
to Decree No. 58/2012/ND-CP which removes all
limits on foreign ownership on domestic bonds
and simplifies the processes and procedures for
foreign investors in domestic capital market
and bond markets.
Fourthly,
bond market is now structured in
line with international practice with increasing
number of quality market intermediaries and
service providers.
The informat ion inf ras t ruc ture on
registration, depositary, listing, trading and
payment of securities has been strengthened
by new investments by the Exchanges and VSD
to ensure smooth, timely and safe transactions.
The lead time from issuance to trading of
Government bond is now 2 days.
The system of financial intermediaries
TABLE 2: TOTAL TRANSACTION OF THE DERIVATIVES MARKET
No.
Items
Unit
September
October
Increase/Decrease (%)
1
Transaction volume
Contracts
131.903
238.330
320.064
2
Transaction value
Bill. VND
10.299,36
19.370,08
28.484,13
3
OI Volume (end of period)
Contracts
3.275
3.949
8.122
Source: State Securities Committee
