stock market in viet nam
TRANSCRIPT
Stock market in Viet Nam
Group 5Nguyen Thi Thu HaTran Thi Thu HaPham Trung KienKieu Hai YenNguyen Van HaMai Thanh Binh
AgendaAgenda
1 Overview1 Overview
2 Key features2 Key features
3 Major risks3 Major risks
4 Solutions 4 Solutions
Overview of VN stock market Overview of VN stock market
bull Starting point
First round took place on 28 june 2000 2 companies listed REE and SACOM
bull 1048698 Foreign invested funds- Public funds- Member funds- Venture capital funds- Hedge funds
bull 1048698 Foreign investors- Invest via commercial presence- Trust
Figures as of 11 may 2007Figures as of 11 may 2007bull Stock 107 companies bull Share Capital 177686 billions VND bull Market Capital 23008564 billions VND
bull Bond 367bull Value by par 57335 billions VND
bull Fund unit 02bull Fund unit capital 1000 billions VNDbull Market Capital 2370 billions VND
VN index (11 may 2007) 103963 points Share capital equal to about 38 GDP OTC market is considered 3 times bigger than the stock
exchange
Vietnamrsquos PE index ( Price on Equity)
Vietnamrsquos PE index ( Price on Equity)
20 biggest companiesrsquo average PE 733
The highest average PE in the world
+ The 2nd Indiarsquos PE index only 204
+ The average PE in the world 162
Abnormally high compared to market standard
Vietnam PE index in risk
FeaturesFeatures
Foreign indirect investment capital in Vietnamese stock market
Foreign indirect investment capital in Vietnamese stock market
Indirect investment capital from foreign investors in Vietnam
Actually reached $ 2 billions Expected $15 billions in the
next 6 months
Source State Bank of Vietnam (SBV) in 2007
Large companies like City Group HSBC JP Morgan Deutsche AGare also investors in the Vietnam stock market70 of indirect investment capital comes from investment funds
Structure of indirect foreign investment in Vietnam stock market
Structure of indirect foreign investment in Vietnam stock market
Source State Bank of Vietnam (2007)
RisksRisks
bull Difficult to generate added value
bull Explains 85 of underperformance
bull Better source of added value
Micro risk
Macro risk
Risk linked to each company=specific risk
Stock market facing many risksStock market facing many risks
Commercial banksCommercial banks
The loans that investor borrow from Commercial banks arersquont controlled the liquidity capacities are threatened
External financeExternal finance
The capital inflow stops suddenly or the capital outflows from the market Difficult to maintain the current balance deficit- Big deficit when the imports increase after integrating in WTO- Large capital inflows may cause difficulties to the implementation of the monetary and foreign exchange policies
Problems must be faced regarding foreign indirect investment capitalProblems must be faced regarding foreign indirect investment capital
1 The foreign investor can withdraw all indirect investment capital in Vietnam stock market at the same time
Influence on bill of exchange reservesRisk for importer and capacity of debt payment
2 ldquoBubblerdquo crisis in real estate marketReasons majority of foreign indirect investment is used for real estate market only minority is served to production and market expansionRisk regression of economy lasting long and difficult to rehabilitate
SolutionsSolutions
bull Further reforms of market institution (Legal and policyframework regulation and operation of the market)
bull Completion of legal framework legal documents underSecurities Law Enterprise Law and legal document on SOE
bull Equalization electronic trading and securities clearing and Settlement
Solutions (cont)Solutions (cont)
bull Policies of SOE Equalization Reduction of State Ownership at enterprises
bull New single financial market supervisory body
bull Development of professional organizations
bull Risk-based regulation of securities market
bull Cooperation in regulation over monetary market and securities market
AgendaAgenda
1 Overview1 Overview
2 Key features2 Key features
3 Major risks3 Major risks
4 Solutions 4 Solutions
Overview of VN stock market Overview of VN stock market
bull Starting point
First round took place on 28 june 2000 2 companies listed REE and SACOM
bull 1048698 Foreign invested funds- Public funds- Member funds- Venture capital funds- Hedge funds
bull 1048698 Foreign investors- Invest via commercial presence- Trust
Figures as of 11 may 2007Figures as of 11 may 2007bull Stock 107 companies bull Share Capital 177686 billions VND bull Market Capital 23008564 billions VND
bull Bond 367bull Value by par 57335 billions VND
bull Fund unit 02bull Fund unit capital 1000 billions VNDbull Market Capital 2370 billions VND
VN index (11 may 2007) 103963 points Share capital equal to about 38 GDP OTC market is considered 3 times bigger than the stock
exchange
Vietnamrsquos PE index ( Price on Equity)
Vietnamrsquos PE index ( Price on Equity)
20 biggest companiesrsquo average PE 733
The highest average PE in the world
+ The 2nd Indiarsquos PE index only 204
+ The average PE in the world 162
Abnormally high compared to market standard
Vietnam PE index in risk
FeaturesFeatures
Foreign indirect investment capital in Vietnamese stock market
Foreign indirect investment capital in Vietnamese stock market
Indirect investment capital from foreign investors in Vietnam
Actually reached $ 2 billions Expected $15 billions in the
next 6 months
Source State Bank of Vietnam (SBV) in 2007
Large companies like City Group HSBC JP Morgan Deutsche AGare also investors in the Vietnam stock market70 of indirect investment capital comes from investment funds
Structure of indirect foreign investment in Vietnam stock market
Structure of indirect foreign investment in Vietnam stock market
Source State Bank of Vietnam (2007)
RisksRisks
bull Difficult to generate added value
bull Explains 85 of underperformance
bull Better source of added value
Micro risk
Macro risk
Risk linked to each company=specific risk
Stock market facing many risksStock market facing many risks
Commercial banksCommercial banks
The loans that investor borrow from Commercial banks arersquont controlled the liquidity capacities are threatened
External financeExternal finance
The capital inflow stops suddenly or the capital outflows from the market Difficult to maintain the current balance deficit- Big deficit when the imports increase after integrating in WTO- Large capital inflows may cause difficulties to the implementation of the monetary and foreign exchange policies
Problems must be faced regarding foreign indirect investment capitalProblems must be faced regarding foreign indirect investment capital
1 The foreign investor can withdraw all indirect investment capital in Vietnam stock market at the same time
Influence on bill of exchange reservesRisk for importer and capacity of debt payment
2 ldquoBubblerdquo crisis in real estate marketReasons majority of foreign indirect investment is used for real estate market only minority is served to production and market expansionRisk regression of economy lasting long and difficult to rehabilitate
SolutionsSolutions
bull Further reforms of market institution (Legal and policyframework regulation and operation of the market)
bull Completion of legal framework legal documents underSecurities Law Enterprise Law and legal document on SOE
bull Equalization electronic trading and securities clearing and Settlement
Solutions (cont)Solutions (cont)
bull Policies of SOE Equalization Reduction of State Ownership at enterprises
bull New single financial market supervisory body
bull Development of professional organizations
bull Risk-based regulation of securities market
bull Cooperation in regulation over monetary market and securities market
Overview of VN stock market Overview of VN stock market
bull Starting point
First round took place on 28 june 2000 2 companies listed REE and SACOM
bull 1048698 Foreign invested funds- Public funds- Member funds- Venture capital funds- Hedge funds
bull 1048698 Foreign investors- Invest via commercial presence- Trust
Figures as of 11 may 2007Figures as of 11 may 2007bull Stock 107 companies bull Share Capital 177686 billions VND bull Market Capital 23008564 billions VND
bull Bond 367bull Value by par 57335 billions VND
bull Fund unit 02bull Fund unit capital 1000 billions VNDbull Market Capital 2370 billions VND
VN index (11 may 2007) 103963 points Share capital equal to about 38 GDP OTC market is considered 3 times bigger than the stock
exchange
Vietnamrsquos PE index ( Price on Equity)
Vietnamrsquos PE index ( Price on Equity)
20 biggest companiesrsquo average PE 733
The highest average PE in the world
+ The 2nd Indiarsquos PE index only 204
+ The average PE in the world 162
Abnormally high compared to market standard
Vietnam PE index in risk
FeaturesFeatures
Foreign indirect investment capital in Vietnamese stock market
Foreign indirect investment capital in Vietnamese stock market
Indirect investment capital from foreign investors in Vietnam
Actually reached $ 2 billions Expected $15 billions in the
next 6 months
Source State Bank of Vietnam (SBV) in 2007
Large companies like City Group HSBC JP Morgan Deutsche AGare also investors in the Vietnam stock market70 of indirect investment capital comes from investment funds
Structure of indirect foreign investment in Vietnam stock market
Structure of indirect foreign investment in Vietnam stock market
Source State Bank of Vietnam (2007)
RisksRisks
bull Difficult to generate added value
bull Explains 85 of underperformance
bull Better source of added value
Micro risk
Macro risk
Risk linked to each company=specific risk
Stock market facing many risksStock market facing many risks
Commercial banksCommercial banks
The loans that investor borrow from Commercial banks arersquont controlled the liquidity capacities are threatened
External financeExternal finance
The capital inflow stops suddenly or the capital outflows from the market Difficult to maintain the current balance deficit- Big deficit when the imports increase after integrating in WTO- Large capital inflows may cause difficulties to the implementation of the monetary and foreign exchange policies
Problems must be faced regarding foreign indirect investment capitalProblems must be faced regarding foreign indirect investment capital
1 The foreign investor can withdraw all indirect investment capital in Vietnam stock market at the same time
Influence on bill of exchange reservesRisk for importer and capacity of debt payment
2 ldquoBubblerdquo crisis in real estate marketReasons majority of foreign indirect investment is used for real estate market only minority is served to production and market expansionRisk regression of economy lasting long and difficult to rehabilitate
SolutionsSolutions
bull Further reforms of market institution (Legal and policyframework regulation and operation of the market)
bull Completion of legal framework legal documents underSecurities Law Enterprise Law and legal document on SOE
bull Equalization electronic trading and securities clearing and Settlement
Solutions (cont)Solutions (cont)
bull Policies of SOE Equalization Reduction of State Ownership at enterprises
bull New single financial market supervisory body
bull Development of professional organizations
bull Risk-based regulation of securities market
bull Cooperation in regulation over monetary market and securities market
bull 1048698 Foreign invested funds- Public funds- Member funds- Venture capital funds- Hedge funds
bull 1048698 Foreign investors- Invest via commercial presence- Trust
Figures as of 11 may 2007Figures as of 11 may 2007bull Stock 107 companies bull Share Capital 177686 billions VND bull Market Capital 23008564 billions VND
bull Bond 367bull Value by par 57335 billions VND
bull Fund unit 02bull Fund unit capital 1000 billions VNDbull Market Capital 2370 billions VND
VN index (11 may 2007) 103963 points Share capital equal to about 38 GDP OTC market is considered 3 times bigger than the stock
exchange
Vietnamrsquos PE index ( Price on Equity)
Vietnamrsquos PE index ( Price on Equity)
20 biggest companiesrsquo average PE 733
The highest average PE in the world
+ The 2nd Indiarsquos PE index only 204
+ The average PE in the world 162
Abnormally high compared to market standard
Vietnam PE index in risk
FeaturesFeatures
Foreign indirect investment capital in Vietnamese stock market
Foreign indirect investment capital in Vietnamese stock market
Indirect investment capital from foreign investors in Vietnam
Actually reached $ 2 billions Expected $15 billions in the
next 6 months
Source State Bank of Vietnam (SBV) in 2007
Large companies like City Group HSBC JP Morgan Deutsche AGare also investors in the Vietnam stock market70 of indirect investment capital comes from investment funds
Structure of indirect foreign investment in Vietnam stock market
Structure of indirect foreign investment in Vietnam stock market
Source State Bank of Vietnam (2007)
RisksRisks
bull Difficult to generate added value
bull Explains 85 of underperformance
bull Better source of added value
Micro risk
Macro risk
Risk linked to each company=specific risk
Stock market facing many risksStock market facing many risks
Commercial banksCommercial banks
The loans that investor borrow from Commercial banks arersquont controlled the liquidity capacities are threatened
External financeExternal finance
The capital inflow stops suddenly or the capital outflows from the market Difficult to maintain the current balance deficit- Big deficit when the imports increase after integrating in WTO- Large capital inflows may cause difficulties to the implementation of the monetary and foreign exchange policies
Problems must be faced regarding foreign indirect investment capitalProblems must be faced regarding foreign indirect investment capital
1 The foreign investor can withdraw all indirect investment capital in Vietnam stock market at the same time
Influence on bill of exchange reservesRisk for importer and capacity of debt payment
2 ldquoBubblerdquo crisis in real estate marketReasons majority of foreign indirect investment is used for real estate market only minority is served to production and market expansionRisk regression of economy lasting long and difficult to rehabilitate
SolutionsSolutions
bull Further reforms of market institution (Legal and policyframework regulation and operation of the market)
bull Completion of legal framework legal documents underSecurities Law Enterprise Law and legal document on SOE
bull Equalization electronic trading and securities clearing and Settlement
Solutions (cont)Solutions (cont)
bull Policies of SOE Equalization Reduction of State Ownership at enterprises
bull New single financial market supervisory body
bull Development of professional organizations
bull Risk-based regulation of securities market
bull Cooperation in regulation over monetary market and securities market
Figures as of 11 may 2007Figures as of 11 may 2007bull Stock 107 companies bull Share Capital 177686 billions VND bull Market Capital 23008564 billions VND
bull Bond 367bull Value by par 57335 billions VND
bull Fund unit 02bull Fund unit capital 1000 billions VNDbull Market Capital 2370 billions VND
VN index (11 may 2007) 103963 points Share capital equal to about 38 GDP OTC market is considered 3 times bigger than the stock
exchange
Vietnamrsquos PE index ( Price on Equity)
Vietnamrsquos PE index ( Price on Equity)
20 biggest companiesrsquo average PE 733
The highest average PE in the world
+ The 2nd Indiarsquos PE index only 204
+ The average PE in the world 162
Abnormally high compared to market standard
Vietnam PE index in risk
FeaturesFeatures
Foreign indirect investment capital in Vietnamese stock market
Foreign indirect investment capital in Vietnamese stock market
Indirect investment capital from foreign investors in Vietnam
Actually reached $ 2 billions Expected $15 billions in the
next 6 months
Source State Bank of Vietnam (SBV) in 2007
Large companies like City Group HSBC JP Morgan Deutsche AGare also investors in the Vietnam stock market70 of indirect investment capital comes from investment funds
Structure of indirect foreign investment in Vietnam stock market
Structure of indirect foreign investment in Vietnam stock market
Source State Bank of Vietnam (2007)
RisksRisks
bull Difficult to generate added value
bull Explains 85 of underperformance
bull Better source of added value
Micro risk
Macro risk
Risk linked to each company=specific risk
Stock market facing many risksStock market facing many risks
Commercial banksCommercial banks
The loans that investor borrow from Commercial banks arersquont controlled the liquidity capacities are threatened
External financeExternal finance
The capital inflow stops suddenly or the capital outflows from the market Difficult to maintain the current balance deficit- Big deficit when the imports increase after integrating in WTO- Large capital inflows may cause difficulties to the implementation of the monetary and foreign exchange policies
Problems must be faced regarding foreign indirect investment capitalProblems must be faced regarding foreign indirect investment capital
1 The foreign investor can withdraw all indirect investment capital in Vietnam stock market at the same time
Influence on bill of exchange reservesRisk for importer and capacity of debt payment
2 ldquoBubblerdquo crisis in real estate marketReasons majority of foreign indirect investment is used for real estate market only minority is served to production and market expansionRisk regression of economy lasting long and difficult to rehabilitate
SolutionsSolutions
bull Further reforms of market institution (Legal and policyframework regulation and operation of the market)
bull Completion of legal framework legal documents underSecurities Law Enterprise Law and legal document on SOE
bull Equalization electronic trading and securities clearing and Settlement
Solutions (cont)Solutions (cont)
bull Policies of SOE Equalization Reduction of State Ownership at enterprises
bull New single financial market supervisory body
bull Development of professional organizations
bull Risk-based regulation of securities market
bull Cooperation in regulation over monetary market and securities market
Vietnamrsquos PE index ( Price on Equity)
Vietnamrsquos PE index ( Price on Equity)
20 biggest companiesrsquo average PE 733
The highest average PE in the world
+ The 2nd Indiarsquos PE index only 204
+ The average PE in the world 162
Abnormally high compared to market standard
Vietnam PE index in risk
FeaturesFeatures
Foreign indirect investment capital in Vietnamese stock market
Foreign indirect investment capital in Vietnamese stock market
Indirect investment capital from foreign investors in Vietnam
Actually reached $ 2 billions Expected $15 billions in the
next 6 months
Source State Bank of Vietnam (SBV) in 2007
Large companies like City Group HSBC JP Morgan Deutsche AGare also investors in the Vietnam stock market70 of indirect investment capital comes from investment funds
Structure of indirect foreign investment in Vietnam stock market
Structure of indirect foreign investment in Vietnam stock market
Source State Bank of Vietnam (2007)
RisksRisks
bull Difficult to generate added value
bull Explains 85 of underperformance
bull Better source of added value
Micro risk
Macro risk
Risk linked to each company=specific risk
Stock market facing many risksStock market facing many risks
Commercial banksCommercial banks
The loans that investor borrow from Commercial banks arersquont controlled the liquidity capacities are threatened
External financeExternal finance
The capital inflow stops suddenly or the capital outflows from the market Difficult to maintain the current balance deficit- Big deficit when the imports increase after integrating in WTO- Large capital inflows may cause difficulties to the implementation of the monetary and foreign exchange policies
Problems must be faced regarding foreign indirect investment capitalProblems must be faced regarding foreign indirect investment capital
1 The foreign investor can withdraw all indirect investment capital in Vietnam stock market at the same time
Influence on bill of exchange reservesRisk for importer and capacity of debt payment
2 ldquoBubblerdquo crisis in real estate marketReasons majority of foreign indirect investment is used for real estate market only minority is served to production and market expansionRisk regression of economy lasting long and difficult to rehabilitate
SolutionsSolutions
bull Further reforms of market institution (Legal and policyframework regulation and operation of the market)
bull Completion of legal framework legal documents underSecurities Law Enterprise Law and legal document on SOE
bull Equalization electronic trading and securities clearing and Settlement
Solutions (cont)Solutions (cont)
bull Policies of SOE Equalization Reduction of State Ownership at enterprises
bull New single financial market supervisory body
bull Development of professional organizations
bull Risk-based regulation of securities market
bull Cooperation in regulation over monetary market and securities market
Foreign indirect investment capital in Vietnamese stock market
Foreign indirect investment capital in Vietnamese stock market
Indirect investment capital from foreign investors in Vietnam
Actually reached $ 2 billions Expected $15 billions in the
next 6 months
Source State Bank of Vietnam (SBV) in 2007
Large companies like City Group HSBC JP Morgan Deutsche AGare also investors in the Vietnam stock market70 of indirect investment capital comes from investment funds
Structure of indirect foreign investment in Vietnam stock market
Structure of indirect foreign investment in Vietnam stock market
Source State Bank of Vietnam (2007)
RisksRisks
bull Difficult to generate added value
bull Explains 85 of underperformance
bull Better source of added value
Micro risk
Macro risk
Risk linked to each company=specific risk
Stock market facing many risksStock market facing many risks
Commercial banksCommercial banks
The loans that investor borrow from Commercial banks arersquont controlled the liquidity capacities are threatened
External financeExternal finance
The capital inflow stops suddenly or the capital outflows from the market Difficult to maintain the current balance deficit- Big deficit when the imports increase after integrating in WTO- Large capital inflows may cause difficulties to the implementation of the monetary and foreign exchange policies
Problems must be faced regarding foreign indirect investment capitalProblems must be faced regarding foreign indirect investment capital
1 The foreign investor can withdraw all indirect investment capital in Vietnam stock market at the same time
Influence on bill of exchange reservesRisk for importer and capacity of debt payment
2 ldquoBubblerdquo crisis in real estate marketReasons majority of foreign indirect investment is used for real estate market only minority is served to production and market expansionRisk regression of economy lasting long and difficult to rehabilitate
SolutionsSolutions
bull Further reforms of market institution (Legal and policyframework regulation and operation of the market)
bull Completion of legal framework legal documents underSecurities Law Enterprise Law and legal document on SOE
bull Equalization electronic trading and securities clearing and Settlement
Solutions (cont)Solutions (cont)
bull Policies of SOE Equalization Reduction of State Ownership at enterprises
bull New single financial market supervisory body
bull Development of professional organizations
bull Risk-based regulation of securities market
bull Cooperation in regulation over monetary market and securities market
Structure of indirect foreign investment in Vietnam stock market
Structure of indirect foreign investment in Vietnam stock market
Source State Bank of Vietnam (2007)
RisksRisks
bull Difficult to generate added value
bull Explains 85 of underperformance
bull Better source of added value
Micro risk
Macro risk
Risk linked to each company=specific risk
Stock market facing many risksStock market facing many risks
Commercial banksCommercial banks
The loans that investor borrow from Commercial banks arersquont controlled the liquidity capacities are threatened
External financeExternal finance
The capital inflow stops suddenly or the capital outflows from the market Difficult to maintain the current balance deficit- Big deficit when the imports increase after integrating in WTO- Large capital inflows may cause difficulties to the implementation of the monetary and foreign exchange policies
Problems must be faced regarding foreign indirect investment capitalProblems must be faced regarding foreign indirect investment capital
1 The foreign investor can withdraw all indirect investment capital in Vietnam stock market at the same time
Influence on bill of exchange reservesRisk for importer and capacity of debt payment
2 ldquoBubblerdquo crisis in real estate marketReasons majority of foreign indirect investment is used for real estate market only minority is served to production and market expansionRisk regression of economy lasting long and difficult to rehabilitate
SolutionsSolutions
bull Further reforms of market institution (Legal and policyframework regulation and operation of the market)
bull Completion of legal framework legal documents underSecurities Law Enterprise Law and legal document on SOE
bull Equalization electronic trading and securities clearing and Settlement
Solutions (cont)Solutions (cont)
bull Policies of SOE Equalization Reduction of State Ownership at enterprises
bull New single financial market supervisory body
bull Development of professional organizations
bull Risk-based regulation of securities market
bull Cooperation in regulation over monetary market and securities market
RisksRisks
bull Difficult to generate added value
bull Explains 85 of underperformance
bull Better source of added value
Micro risk
Macro risk
Risk linked to each company=specific risk
Stock market facing many risksStock market facing many risks
Commercial banksCommercial banks
The loans that investor borrow from Commercial banks arersquont controlled the liquidity capacities are threatened
External financeExternal finance
The capital inflow stops suddenly or the capital outflows from the market Difficult to maintain the current balance deficit- Big deficit when the imports increase after integrating in WTO- Large capital inflows may cause difficulties to the implementation of the monetary and foreign exchange policies
Problems must be faced regarding foreign indirect investment capitalProblems must be faced regarding foreign indirect investment capital
1 The foreign investor can withdraw all indirect investment capital in Vietnam stock market at the same time
Influence on bill of exchange reservesRisk for importer and capacity of debt payment
2 ldquoBubblerdquo crisis in real estate marketReasons majority of foreign indirect investment is used for real estate market only minority is served to production and market expansionRisk regression of economy lasting long and difficult to rehabilitate
SolutionsSolutions
bull Further reforms of market institution (Legal and policyframework regulation and operation of the market)
bull Completion of legal framework legal documents underSecurities Law Enterprise Law and legal document on SOE
bull Equalization electronic trading and securities clearing and Settlement
Solutions (cont)Solutions (cont)
bull Policies of SOE Equalization Reduction of State Ownership at enterprises
bull New single financial market supervisory body
bull Development of professional organizations
bull Risk-based regulation of securities market
bull Cooperation in regulation over monetary market and securities market
Stock market facing many risksStock market facing many risks
Commercial banksCommercial banks
The loans that investor borrow from Commercial banks arersquont controlled the liquidity capacities are threatened
External financeExternal finance
The capital inflow stops suddenly or the capital outflows from the market Difficult to maintain the current balance deficit- Big deficit when the imports increase after integrating in WTO- Large capital inflows may cause difficulties to the implementation of the monetary and foreign exchange policies
Problems must be faced regarding foreign indirect investment capitalProblems must be faced regarding foreign indirect investment capital
1 The foreign investor can withdraw all indirect investment capital in Vietnam stock market at the same time
Influence on bill of exchange reservesRisk for importer and capacity of debt payment
2 ldquoBubblerdquo crisis in real estate marketReasons majority of foreign indirect investment is used for real estate market only minority is served to production and market expansionRisk regression of economy lasting long and difficult to rehabilitate
SolutionsSolutions
bull Further reforms of market institution (Legal and policyframework regulation and operation of the market)
bull Completion of legal framework legal documents underSecurities Law Enterprise Law and legal document on SOE
bull Equalization electronic trading and securities clearing and Settlement
Solutions (cont)Solutions (cont)
bull Policies of SOE Equalization Reduction of State Ownership at enterprises
bull New single financial market supervisory body
bull Development of professional organizations
bull Risk-based regulation of securities market
bull Cooperation in regulation over monetary market and securities market
Problems must be faced regarding foreign indirect investment capitalProblems must be faced regarding foreign indirect investment capital
1 The foreign investor can withdraw all indirect investment capital in Vietnam stock market at the same time
Influence on bill of exchange reservesRisk for importer and capacity of debt payment
2 ldquoBubblerdquo crisis in real estate marketReasons majority of foreign indirect investment is used for real estate market only minority is served to production and market expansionRisk regression of economy lasting long and difficult to rehabilitate
SolutionsSolutions
bull Further reforms of market institution (Legal and policyframework regulation and operation of the market)
bull Completion of legal framework legal documents underSecurities Law Enterprise Law and legal document on SOE
bull Equalization electronic trading and securities clearing and Settlement
Solutions (cont)Solutions (cont)
bull Policies of SOE Equalization Reduction of State Ownership at enterprises
bull New single financial market supervisory body
bull Development of professional organizations
bull Risk-based regulation of securities market
bull Cooperation in regulation over monetary market and securities market
SolutionsSolutions
bull Further reforms of market institution (Legal and policyframework regulation and operation of the market)
bull Completion of legal framework legal documents underSecurities Law Enterprise Law and legal document on SOE
bull Equalization electronic trading and securities clearing and Settlement
Solutions (cont)Solutions (cont)
bull Policies of SOE Equalization Reduction of State Ownership at enterprises
bull New single financial market supervisory body
bull Development of professional organizations
bull Risk-based regulation of securities market
bull Cooperation in regulation over monetary market and securities market
Solutions (cont)Solutions (cont)
bull Policies of SOE Equalization Reduction of State Ownership at enterprises
bull New single financial market supervisory body
bull Development of professional organizations
bull Risk-based regulation of securities market
bull Cooperation in regulation over monetary market and securities market
