The Ministry of Finance and the state Securities Commission (SSC), together with other relevant agencies, proposed plans to give a fresh boost to the stagnant bourse.
The total stock market capitalisation makes up roughly 1% of the country’s gross domestic product although it rose a lot in 2004, according to the SSC. The target is 4-5% this year and 10-15% by 2010.
In the next five years SSC will develop a bond market where companies can gain easier access to mid-and long-term capital, a move that will in turn help reduce risks for banks, which are now the main financiers in the economy, said SSC vice chair Nguyen Doan Hung said.
The first approach is to set up a credit rating agency, Hung said. SSC will then allow those corporations and big companies with high ratings to issue bonds on the bourse.
The current Securities Trading Centre (STC) will be developed into a real stock exchange, where companies can seek approval for any bond and share issues while securities firms can provide full services such as brokerage, dealing, consulting, portfolio management, underwriting and custody.
A second bourse in Hanoi is expected to make debut some time before the Lunar New Year holidays, or Tet, which falls on February 9, as an over-the counter market for small companies to trade their shares.
Last year, there was an additional 12.5 trillion dong worth of shares trading on the STC, a 93.4%year-on-year increase.
Securities firms made big contributions to stirring the market, underwriting share issues by 20 companies going public, and providing consulting for 100 companies to undergo equitisation and 10 companies to list on the bourse.
The number of accounts opened at 13 securities firms had reached 20,300 by end 2004, up 18%.
The market, which now has 26 corporate stocks, one equity fund stock and one corporate bond, has its average trading value of 80 billion dong a session.