Chairman of the State Securities Commission (SSC) Vu Bang had his first online talk with the public yesterday from the office of the online newspaper run by the Communist Party of Viet Nam. The Chairman received some 1,500 questions pertaining to the discussion’s theme entitled “Viet Nam’s securities market: Current situation and sustainable and rapid development measures”.
Short-term investment impacts the market
|SSC Chairman Vu Bang answers questions online with the public yesterday|
The Chairman remarked that the stock market has developed strongly over the past seven years, with total market capitalization having reached some US$22 billion, equivalent to 38 percent of the country’s gross domestic product (GDP) and 46 percent if bonds are included.
Both the Government and private businesses have used the stock market as a channel to mobilize long-term capital for the economy.
However, he said, there is still an imbalance between supply and demand which causes the market to become unstable. The main culprit, he feels, is the public’s short-sighted investment philosophy.
Answering questions about spy transactions and speculation, both of which have upset the market, Chairman Bang said that spy transactions are very sophisticated and because the field is new to them, investigators will need time to unravel suspicious transactions.
Mr. Bang admitted that with the market’s rapid development and the increasing number of investors, violations have been occurring when some stock companies post their orders ahead of their customer’s.
“The SSC will closely monitor securities staff and request stock companies to clarify regulations on how their orders are to be posted” he said adding that “those cases which violate the Law on Securities will be punished severely”.
Regarding the over-the-counter (OTC) stock market, which has become fever hot recently, he said he understood that it has been operating in the absence of regulations.
The unofficial market lacks transparent information and contains many risks for investors and if no strong measures are taken to put it on the right track a collapse will be unavoidable and adversely affect the official stock market in a domino effect, he admitted.
Mr. Bang pointed out that his agency is taking steps to reduce the scale of OTC transactions by ordering all public companies, including unlisted ones, to register their operations again, be audited, and publish information in line with the Law on Securities.
The SSC will ask public companies to increase their efforts to reduce payment risks on the unofficial market, he added.
He also unveiled new rules regarding the type of punishments violators can expect to receive. The SSC will apply these rules to the transactions of unlisted shares and encourage investors to do transactions through securities companies.
Deposit payments will be conducted through the securities deposit center, thus gradually publicizing OTC operations and attracting transactions onto the official market, he concluded.
In related news, Prime Minister Nguyen Tan Dung has asked authorities to take appropriate measures to ensure stable and sustainable development of the Vietnamese stock market.
Under the decree, administrative activities in the field of securities and the securities market include share trading, public limited companies, share listing, transaction, registration, compensation, custody, payment, public announcement and reporting.