The Hồ Chí Minh Stock Exchange receives a certificate of merit from the Prime Minister for its achievements over the last 20 years at a ceremony to celebrate 20 anniversary of the Vietnamese stock market. — VNA/VNS Photo

HCM CITY — The securities market has been successful over the past 20 years, but has to grow rapidly now to achieve emerging market status, Prime Minister Nguyễn Xuân Phúc told a ceremony held to celebrate the 20th anniversary of the Vietnamese stock market at the Hồ Chí Minh Stock Exchange on Monday (July 20).

“From being a securities trading centre with only two listed companies when it opened on July 20, 2000, Việt Nam's stock market now has more than 1,600 firms listed and traded on the two stock exchanges with a market capitalisation of over VNĐ4 quadrillion (US$173 billion), equivalent to 65 per cent of the country’s GDP.

Trần Văn Dũng, chairman of the State Securities Commission of Việt Nam, said, “The government bond market was established more than 10 years ago and quickly confirmed its role as an effective capital mobilisation channel for the Government.

“The Government has mobilised more capital, for longer terms and with reducing interest rates, contributing to the efficient restructuring of [its] public debt.

“The derivatives market established over three years ago has grown rapidly at an average of 3.3-fold a year, providing additional investment tools and effective risk management tools.

“We also see that the securities market has contributed significantly to the equitisation of State-owned enterprises in the last 20 years. Many firms have listed on the exchange after equitisation and developed more efficiently.”

Phúc said the stock market has improved consistently in terms of quality and structure, and grown strongly in scale to become an important capital mobilisation route for the economy.

The country is entering a new stage of development in a “new normal” state, he said.

“We have … successfully controlled the pandemic. Therefore, we need to take proper advantage of this unique opportunity to restore and develop the socio-economy, and attract domestic resources and regional and global capital flows to meet our huge demand for investment and development in the short and long terms.”

The market needs to achieve “breakthrough development in both scale and quality to better meet the medium- and long-term capital needs of the economy and share the task of capital mobilisation with the credit and banking systems”.

The securities industry should strive to raise Việt Nam's stock market from “frontier market” to “emerging market” status soon to turn it into “a reliable destination for international financial institutions and major investors in the region and globally”, he said.

To further boost its development, he said relevant ministries and agencies should soon create institutions and complete mechanisms and policies for comprehensive development of the financial and monetary markets, especially the stock market, to create a favourable business environment and fair and equal opportunities for businesses and investors.

They need to quickly develop the market in terms of scale and quality, including accelerating equitisation of SOEs and their listing on the stock market and encouraging private firms to list; improving management, inspection, supervision, and enforcement of the law to ensure the market is open and transparent; and protecting the legitimate rights and interests of its participants, he said.

He also called on stakeholders in the securities market to quickly adopt international standards in terms of markets, financial services, accounting, auditing, and corporate governance practices.

Official agencies need to improve their capacity for analysis and forecast of the market to take timely measures to cope with abnormal fluctuations in the international and domestic markets, and ensure the security and safety of businesses, investors and the stock market, and generally the financial and monetary markets, he said.

He highlighted the need for renovating the IT system and adopting Industry 4.0 technologies to improve securities and financial services.

Dũng said: “Besides its achievements, the market also has many limitations that need to be overcome to meet the higher requirements and contribute to the overall development of the country.

“Some new trading systems and products on both the basic market and derivatives market need to be put into operation soon.

“Human resources involved in the management and operation of the securities market need to focus on improving their capacity to meet the new management requirements in the context of rapid changes in technology and complex developments in the international and domestic markets,” he added.

At the ceremony, HOSE received a certificate of merit from the Prime Minister for its achievements over the last 20 years. — VNS