Vietnam targets having 5pct of population invest in securities by 2025

23-Mar-2019 Intellasia | Vietnamnet | 6:00 AM Print This Post

Analysts believe the goal to increase the number of investors in securities is within reach as Vietnam’s stock market is expected to be upgraded to a secondary emerging market.

Raising the number of securities investors to 3 percent of total population by 2020 and 5 percent by 2025; ensuring reasonable proportions of institutional and individual investors; and obtaining the ‘emerging’ status prior to 2025 are the major points of the recently released government’s plan on developing the stock market by 2020.

To date, only 2.2 percent of total population have made securities investments, though the stock market opened 20 years ago. The figure is based on the number of investors’ accounts opened so far.

The number fluctuates because one investor can open many accounts for transactions at many different securities companies. There are also a number of inactive accounts.

In order to develop the stock market, it is necessary to attract more investors. The responsibility of the state management agency is building and managing the market in an effective way to lure more participants.

In other countries, the majority of securities investors are institutions. By contrast, in Vietnam, individual investors account for the overwhelming majority. There are not many investment institutions from which to choose in Vietnam.

Some securities companies in Vietnam have investment funds and make authorised investments, but only on a small scale. Large investment funds in the stock market mostly mobilise foreign capital.

Many things that need to be done have been mentioned in the plan perfecting the legal framework, speeding up equitisation, developing derivatives, restructuring securities companies and setting up more types of investment funds.

However, analysts said the most important factor is improving the liquidity of the market. The measures include widening the price fluctuation band within the day, applying automatic breaking which will activate if the market sees heavy fluctuations, and extending the trading time.

In recent years, financial experts have suggested classifying stocks according to certain criteria. However, the classification has yet to be implemented.

At present, the stocks listed on bourses belong to companies from different business fields, with different operation scales and business results.

As a result, stock investors find it difficult to compare the shares of companies in the same business fields and have to seek information from the Hanoi and HCM City bourses and UpCom.

“Raising the number of securities investors to 3 percent of total population by 2020 and 5 percent by 2025; ensuring reasonable proportions of institutional and individual investors; and obtaining the ‘emerging’ status prior to 2025 are the major points of the recently released plan on developing the stock market by 2020.”

https://english.vietnamnet.vn/fms/business/219993/vietnam-targets-having-5–of-population-invest-in-securities-by-2025.html

 


Category: Stocks, Vietnam

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