HA NOI (VNS)— The State Securities Commission should consider several changes on the stock market to lure foreign capital, such as applying a T+0 or T+1 settlement period and restructuring companies.
The opinion was voiced by the capital market working group on the sidelines of the Viet Nam Business Forum (VBF).
Dragon Capital director Dominic Scriven, a representative from the group, said the Vietnamese stock market showed signs of recovery, but the rally could not yet be called sustainable.
Foreign investors were interested in the market, but still observing and waiting for more opportunities, he added.
Although trading hours were extended until 2.15pm from March last year, it was not the key to boost liquidity.
The main issue, according to experts, was shorter time for stocks to come to investors' accounts. In September last year, the settlement period was shortened from T+4 to T+3. However, investors asked for further improvements.
One of foreign investors' biggest concerns was the efficiency of securities companies. "The number of 105 companies is too many, while in practice, only 10 leading firms have taken over 50 per cent market share," the group stated in a report. "The rest of the pie for 95 companies was too small to maintain operations."
Therefore, the securities commission should promote the restructuring of brokerages to assure the benefits of foreign investors when opening accounts in these companies.
VinaCapital's Terry Mahony highlighted state-run enterprises' (especially in the telecommunications and banking sectors) equitisation as a method to attract foreign investors.
By law, businesses must list shares within 12 months of equitising, but the regulation is still not completely adhered to. Meanwhile, Mahony urged for listing to be mandatory within just one month of equitisation.
To improve trading liquidity, the working group also suggested changes in the price fluctuation limit for stocks (currently 7 per cent on the HCM City Stock Exchange and 10 per cent on the Ha Noi Stock Exchange).
The working group proposed to halting trading within 30 minutes when share prices approached their ceiling or floor prices. After the half-hour pause, these ceiling or floor prices would become the new reference prices.
The 7 per cent and 10 per cent amplitudes were a bar to the natural circulation of cash, the group said.
The commission vice president Nguyen Doan Hung responded that the agency was working on these issues in accordance with the stock market's strategic development by 2020. — VNS