The Vietnamese stock market (VSM) has maintained steady growth despite various fluctuations. On the occasion of the Lunar New Year 2024, Chairwoman of the SSC Ms. Vu Thi Chan Phuong answered an interview with Banking Times on effective management and operation solutions for the VSM, continuing to be a channel for capital mobilization for the economy…
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| Ms. Vu Thi Chan Phuong |
In 2023, despite many fluctuations, the Vietnamese stock market has made positive recovery in the later months. How do you evaluate the results that the market has achieved in the past year?
In 2023, in the context of continued difficulties and challenges in the global economic and political situation, thanks to the high determination of the political system led by the Party and Government, the domestic economy has maintained a positive trend, achieved the set general objectives and many important results, with stable macroeconomic conditions, controlled inflation, and promoted growth.
Although the Vietnamese stock market has experienced various fluctuations, it still maintains stable growth momentum with a market capitalization of VND 5,937 trillion for stocks listed on the three main exchanges HoSE, HNX, and UPCoM, up 13.6% compared to the end of 2022, equivalent to 58.1% of GDP in 2023 (62.4% of estimated GDP in 2022).
In the stock market, the VN-Index as of 29/12/2023 has increased by 12.2% compared to the end of 2022 to 1,129.93 points with improved liquidity. Listing and trading activities have also had positive changes with listed value and traded registrations 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.
The government bond market has also recorded positive results with the value of listed bonds as of the end of December 2023 increasing 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, to implement the regulations on privately placed corporate bonds to be traded on the organized market in Decree No. 65/2022/ND-CP, the SSC has directed the Vietnam Stock Trading Exchange (VNX), Hanoi Stock Trading Exchange (HNX), and Vietnam Securities Depository to implement technical infrastructure preparations to put the privately placed bond trading system into official operation from July 19, 2023. The establishment of the privately placed bond market will provide additional information about the privately placed bond market from the primary to secondary levels, contributing to the sustainable and transparent development of the market until now…
Looking back at the activities of the market in 2023, although it has gone through many fluctuations, under the leadership of the Party and Government, the Ministry of Finance, the stock market in 2023 has been stable and sustainably growing, continuing to fulfill its role as an effective channel for medium and long-term capital mobilization for the economy, reflecting the resilience of the economy.
In 2023, the SSC actively conducted investment promotion campaigns in foreign countries, thereby attracting the attention of foreign investors to the Vietnamese stock market. Could you share more about this issue?
Indirect investment promotion programs in foreign countries have been one of the annual activities of the SSC, starting in 2014. Investment promotion programs have played an important part in promoting the potential of the Vietnamese stock market to the international investment community, helping to stimulate and attract indirect investment capital into the Vietnamese stock market. Although it was interrupted for three years due to the Covid-19 pandemic (2020-2022), the Vietnamese stock market has had many changes in both quantity and quality, with positive development prospects, becoming a bright spot in the international capital market.
In 2023, with the normalizing of economic and social activities after the pandemic, the SSC continued to carry out investment promotion programs in various forms, especially contact programs and dialogues with investors embedded in the framework of the SSC and the Ministry of Finance’s foreign affairs programs, such as in July 2023, Minister of Finance Ho Duc Phoc chaired a roundtable conference on “Connecting Vietnam – Luxembourg building a green capital market” in Luxembourg. Later in August 2023, the SSC organized a conference to meet with institutional investors and partners with the theme “Unveiling the potential of the Vietnamese stock market – towards a new emerging market” in Hong Kong (China). In November 2023, the SSC continued to coordinate with units under the Ministry of Finance to organize the Financial Investment Promotion Conference chaired by the Minister of Finance with the theme “Bright growth prospects” in Los Angeles, USA.
The indirect investment promotion activities in foreign countries have received active participation from the domestic investment community, including large financial institutions, investment funds, and enterprises with the need to expand business to Vietnam.
In 2024, what opportunities and challenges will the stock market face?
The developments in the stock market in the coming period will continue to depend largely on macroeconomic policies and economic prospects both domestically and globally. According to the International Monetary Fund (IMF), the tightening monetary policies have gradually rebalanced aggregate demand toward potential output levels, supply chain disruptions, and commodity prices have eased. Global inflation is forecasted to gradually decrease and return to near the target levels of central banks in 2024.
However, the Vietnamese economy in general and the stock market in particular are still expected to face many difficulties and challenges.
Nevertheless, the development of the stock market in 2024 is still supported by positive factors. The government, the Prime Minister have been and are actively and resolutely directing various ministries, sectors, and localities to implement many solutions to overcome difficulties, stabilize, and promote economic growth. Some of these solutions include reducing lending interest rates, stabilizing the foreign exchange market, promoting disbursement of public investment capital, implementing credit support packages for sectors and fields, removing obstacles and difficulties in the real estate market and FDI market, exempting, reducing, and deferring taxes and fees to support businesses. Therefore, a more positive trend will continue in many industries and sectors; the prospects for the Vietnamese economy are still highly evaluated by international organizations, especially after the recent upgrade of the comprehensive strategic partnership with the US.
Could you share some orientations and operational solutions to make the stock market an effective channel for medium and long-term capital mobilization for the economy?
As analyzed above, 2024 will have many opportunities and challenges for the Vietnamese stock market. In this context, to develop the stock market safely, sustainably, and as an effective channel for medium and long-term capital mobilization for the economy, the SSC will focus and make efforts in the following key tasks:
First, continue to improve the legal framework and policy system for market development; focusing on completing the construction of implementation plans for the stock market development strategy by 2030.
Second, promote the modernization of technology infrastructure, master and enhance the application of science and technology, focusing on coordinating with relevant units to put new information technology systems into official operation as soon as possible, creating conditions for the birth of new products and services in the market.
Third, enhance inspection, examination, and supervision to ensure the sustainable development of the stock market, which is public, transparent, and promptly handle and strictly deal with any violations of the law in the stock market.
Fourth, continue to restructure the stock market, strengthen the management of securities business organizations and practitioners.
Fifth, diversify the investor base, develop an organizational investor system, encourage long-term foreign investment, and train individual investors.
Sixth, boost foreign affairs and international cooperation, organize investment promotion programs abroad, work with foreign investors, and rating agencies to raise the rating of the Vietnamese stock market from a frontier market to an emerging market as soon as possible.
Thank you very much!
