HA NOI — The State Securities Commission has asked the State Bank of Viet Nam to consider adjusting its policies towards commercial bank loans to securities investors, with commission chairman Vu Bang claiming several times over the past months that lending against securities investments shouldn't be lumped in with other forms of "non-productive" credit.
Both the stock and real estate markets declined heavily last year due to unfavourable credit policies. However, the State Bank has already decided to loosen credit for the real estate market by excluding some specific types of real estate investment, e.g., low-income housing, from the non-productive classification.
Bang has asserted that adjusting credit flows into the stock market would help ease pressure on the stock market as well as encourage investors to buy shares on the primary market, thereby contributing capital to companies and helping them develop operations.
Anticipation of a positive move by the State Bank on policy towards securities lending may have helped the stock market make gains in the first trading days after the start of the lunar new year, he suggested. Several newspapers had commented that looser credit policies were expected, a move expected to give a shot in the arm to the stock market after three years of declines.
Tight credit policies have strangled stock market growth, causing heavy investor losses and slowing progress on major initiatives like the equitisation and restructuring of State-owned enterprises, as well as causing the Government to lose significant tax revenues.
The recent launch of the VN30 Index and possible extension of daily trading hours, meanwhile, were only technical solutions which could not address the central issue. — VNS