The post-merger exchange should operate as a parent company and the two bourses in HCM City and Hà Nội still continue to operate independently, Trần Hoàng Ngân, Director of the Hồ Chí Minh City Cadre Institute, told the 14th National Assembly’s eighth meeting on Tuesday in Hà Nội. — Photo cafef.vn

HÀ NỘI — The State should hold 100 per cent capital at the Việt Nam stock exchange, expected to be merged from the two current bourses under the revised draft Law on Securities, an official said.

Trần Hoàng Ngân, Director of the Hồ Chí Minh City Cadre Institute, a member of the National Assembly's (NA) Economic Committee and member of the Prime Minister's economic advisory group, made the statement at the 14th National Assembly’s eighth meeting on Tuesday in Hà Nội.

Việt Nam's stock market capitalisation has reached VNĐ5.6 quadrillion (US$239 billion), equivalent to over 100 per cent of the country’s gross domestic product (GDP) in 2018, of which the capitalisation of the Hồ Chí Minh Stock Exchange contributes over 85 per cent, Ngân told the meeting.

“The stock market now has about 2.3 million investor accounts, of which foreign investors only have 30,000, but they are holding about 25 per cent of the capitalisation value. This means we must be more cautious in organising the stock market,” Ngân said.

"Therefore, I propose that the Việt Nam Stock Exchange operate under the model of a one-member limited liability company whose 100 per cent of capital is owned by the State,” he said.

Ngân’s idea builds on the regulations about the post-merger exchange currently stated in the revised draft Law on Securities, which says that the State holding in the combined exchange will be over 50 per cent.

Under the draft law, the two national stock exchanges will be merged into one single stock exchange, headquartered in the capital.

But Ngân is opposed to the plan and said this model would constrain the development of the stock market.

The post-merger exchange should operate as a parent company and the two bourses in HCM City and Hà Nội still continue to operate independently, Ngân said.

Under the draft law, the post-merger stock exchange will be managed by the Ministry of Finance, acting as a focal point for issuing regulations on stock listings and trading, monitoring the stock market, managing risk and directly organising securities transactions.

Minister of Finance Minister Đinh Tiến Dũng said that the Ministry of Finance’s Drafting Board will receive and carefully research Ngân’s ideas.

Dũng said the stock exchange combination plan will be executed from now till 2023.

The combined exchange will be equitised, but not in the next five years. — VNS