Securities market expects new policies

08:21 | 30/05/2015 Economy

(VEN) - Upgrading the domestic securities market to make it more attractive to foreign investors, and improving legal documents and policies to solve its difficulties are expected to promote better growth in the securities market.

Securities market  expects new policies

The exchange rate adjustment helps enterprises to take the initiative in business plan preparation

Since the beginning of May, the Ho Chi Minh Stock Exchange (HOSE) has officially used the Financial Instrument Global Identifier (FIGI) in providing information about shares listed on its website. The use of FIGI and the International Securities Identification Number (ISIN) is aimed at enhancing the transparency of the market and facilitating global investor access to information about shares listed on HOSE’s website.

Peter Warms, Global Data Manager for entity content, corporate actions and symbology at Bloomberg, said that FIGI was a 12-digit alpha-numeric identifier developed based on Bloomberg’s Open Symbology (BSYM). BSYM is a flexible and open system for identifying securities across all global asset classes. The use of FIGI allows HOSE to contribute to boosting the growth of global stock exchanges including those in new emerging markets.

HOSE General Director Phan Thi Tuong Tam said that using the FIGI was a pioneer effort to facilitate and attract global investment into the Vietnamese securities market through following international practices.

Currently, HOSE is building its Total Return Index (TRI) and plans to launch it in the third quarter of this year. HOSE Research and Development Department Director Nguyen Thi Viet Ha said that apart from elements that figure out existing indexes, the TRI was being developed also based on two other elements: pidend and reinvestment. Existing indexes such as VNAllshare, VN30, VNSmall, and VNMid are just price indexes that do not consist of pidends and therefore cannot reflect the actual growth of investment funds. Meanwhile, the TRI will help securities investors better assess the growth of investment funds. HOSE is also negotiating copyright-related matters with Morgan Stanley Capital International (MSCI) in order to build sector indexes according to MSCI global standards. If negotiations are successful, these indexes will be launched this coming July.

New policies expected      

Regarding support policies to promote stable and steady growth of the securities market in the time to come, Nguyen Son, Head of the Market Development Department under the State Securities Commission (SSC), said that the SSC was improving necessary legal documents and policies to solve difficulties facing the market. The Ministry of Finance is consulting the Ministry of Justice about draft amendments to Decree 58/2012/ND-CP before submitting them to the government in the second quarter of this year. The amendments were drafted with the aim to facilitate foreign investment in the Vietnamese securities market through loosening existing regulations on the allowable percentage of shares to foreign investors in accordance with the Investment Law 2014 and Vietnam’s commitments with the World Trade Organization.

The amendments also aim at narrowing free markets to increase market liquidity and protect shareholder interests. The securities services market will be opened, allowing foreign securities services providers to own a maximum percentage of capital in Vietnamese securities companies. Circulars related to information announcement and business management will be amended to ensure transparency. The SSC is striving to promote investment and upgrade the Vietnamese securities market to make it more attractive to foreign investors. 

By Ngoc Thao