Stock Market

Cross-Listing on the Vietnam-Singapore Stock Exchange: A Study

Last week, Minister Ho Duc Phoc held a meeting with Mr. Chia Der Jiun, Executive Director of the Monetary Authority of Singapore (MAS). During this productive meeting, a range of topics related to financial cooperation were discussed, paving the way for enhanced collaboration and new opportunities between the Ministry of Finance of Vietnam and Singapore's monetary authority.

Administrator

7 August, 2024

Together for Development

Attending the meeting, on the Vietnamese side, were Mai Phuoc Dung, Vietnamese Ambassador to Singapore; Mai Xuan Thanh, General Director of the General Department of Taxation; Vu Thi Chan Phuong, Chairwoman of the State Securities Commission; Dinh Ngoc Thang, Deputy General Director of the General Department of Vietnam Customs; and representatives of functional units under the Ministry of Finance and the State Securities Commission.

On the MAS side were Ms. Abigail Ng, Director of Market Policy and Consumer Affairs Division; Ms. Dawn Chew, Director of International Cooperation Division; and representatives of units under the Monetary Authority of Singapore.

At the meeting, Mr. Chia Der Jiun congratulated and welcomed the Minister and the delegation on their visit and working session with MAS. He expressed his hope that the Minister and the delegation would have a very successful trip to Singapore.

According to Mr. Chia Der Jiun, Vietnam and Singapore have great potential for cooperation and promoting the development of the capital market; linking the development of the capital market based on the strengths of the two countries to support businesses in both countries to grow and contribute to the trade and investment of the two nations.

“The signing of the Memorandum of Understanding between the two Stock Exchange Departments this morning is a testament to the commitment to cooperation between the two countries, whereby experiences and knowledge will be shared to support the development of both nations,” said Mr. Chia Der Jiun.

Informing the Vietnamese Minister and delegation about MAS and Singapore’s macroeconomic situation, Mr. Chia Der Jiun said that MAS plays a role as the central bank, formulating monetary management policies, and also has the role of managing the financial market, including the securities market, the capital market, and banking and insurance services.

Mr. Chia Der Jiun also shared Singapore’s macroeconomic situation after the COVID-19 pandemic outbreak and the solutions applied by the government to control inflation and stabilize the currency exchange rate. Thanks to appropriate solutions in each short-term phase, Singapore has successfully controlled inflation, maintained exchange rate stability, and achieved growth targets.

The MAS Managing Director also believed that there are optimistic medium-term prospects for the Asian economy as Singapore has observed an increasing trend of investment into Southeast Asia, including Vietnam, and of course, Singapore itself.

“Singapore used to have traditional investors from the US, Europe, and Korea, and now we also have investors from China. These investment activities bring common benefits to the Southeast Asian region, including Vietnam,” shared Mr. Chia Der Jiun.

Minister Ho Duc Phoc and Mr. Chia Der Jiun, Executive Director of the Monetary Authority of Singapore, exchange ideas on the sidelines of the meeting

Thanking Mr. Chia Der Jiun for the warm reception and sharing, Minister Ho Duc Phoc appreciated the relationship between Vietnam and Singapore, which has a tradition of over 50 years and is of utmost importance and significance to Vietnam.

Currently, the cooperation in culture, trade, and investment between the two countries is growing stronger. The FDI capital from Singapore invested in Vietnam has reached 75 billion USD. The import and export turnover between the two countries has reached 9 billion USD. “I hope that in the future, investment attraction and import-export turnover between the two countries will grow even stronger,” said the Minister.

Sharing about Vietnam’s macroeconomic situation, Minister Ho Duc Phoc said that in 2023, Vietnam’s GDP growth reached 5.05%. In the first 6 months of 2024, the growth rate was 6.42%, and it is expected to reach 6.5% by the end of 2024. The CPI index is about 3%, and the public debt is 37% of GDP, below the 60% limit set by the National Assembly. The state budget deficit is below 4%; the VND/USD exchange rate is stable; interest rates of commercial banks have decreased. The outstanding loans of Vietnamese commercial banks are about 13 million billion VND. The stock market’s liquidity is about 7% of GDP. Bond debt is about 1 million billion, or 9% of credit debt. Vietnam is currently implementing an expansionary fiscal policy. We have reduced taxes and fees for people and enterprises by about 33 billion USD. At the same time, we have increased spending in the economy to support businesses and develop infrastructure, with an additional amount of about 20 billion USD.

Minister Ho Duc Phoc and Mr. Chia Der Jiun, Executive Director of the Monetary Authority of Singapore (MAS), shake hands.

Studying Cross-listing on Vietnam-Singapore Stock Exchanges

Regarding future cooperation, the Minister proposed deeper collaboration between the two countries’ securities agencies to share experiences in management, technology, and knowledge of the bond and stock markets. According to the Minister, this creates favorable conditions for enterprises on both sides to cooperate and invest.

In addition, it was suggested to elevate the cooperation between VNX and SGX, with the hope that the two sides could list shares and bonds on each other’s stock markets. Vietnam is also particularly interested in how to issue green bonds and develop the carbon credit market to meet the goal of net-zero emissions by 2050, as committed at COP 26.

Regarding financial technology and digital finance, as the Ministry of Finance has been assigned by the Government to research some related content, we would like to explore this field. “We very much want to send people to Singapore for training or invite Singaporean experts to train our officials in Vietnam,” shared the Minister.

In response to Minister Ho Duc Phoc’s proposal, Mr. Chia Der Jiun appreciated Vietnam’s cautious approach to achieving good fiscal policy indicators. He also fully agreed with the Minister’s proposals and affirmed that MAS would promote the implementation of these contents.

Regarding the proposal of cross-listing and dual listing of shares and bonds on each other’s stock markets to promote the liquidity of the capital and stock markets, Mr. Chia Der Jiun thought this was a great idea. In addition, the MAS Director suggested that the two sides could study the development of depository receipts to enhance the liquidity of the stock market.

“We are willing to cooperate in further research in this field, and the stock exchanges of the two countries also need to join hands in this endeavor. From the perspective of the market regulatory agency, MAS will review and consider addressing any obstacles to promote bilateral cooperation,” affirmed Mr. Chia Der Jiun.

Regarding green finance and the carbon market, Mr. Chia Der Jiun expressed his support and believed that when implementing these programs, trust and confidence are essential. For MAS, we have the initiative to introduce carbon credit products for transition finance. First, we will focus on reducing coal-fired power projects, and we are gathering financial organizations to coordinate with MAS agencies to introduce transition finance tools. Through this pilot project, MAS hopes to build trust and confidence among coal-fired power project owners so that they commit to reducing coal-fired power generation and among the participating managers to reduce coal-fired power generation.

“This is not just about calling for investment in transition projects but also about building investors’ trust in the government’s policies to shift from coal-fired power to cleaner energy sources. And we have already identified two power projects in Southeast Asia, and we hope that we can work together to identify suitable projects in Vietnam to implement,” said Mr. Chia Der Jiun.

Nhat Quang