Securities market rises to new heights

16:31 | 10/02/2016 Finance - Banking

(VEN) - Vietnam Economic News’ Minh Long talked with Dr Tran Dac Sinh, Chairman of the Ho Chi Minh Stock Exchange (HOSE) Management Board, who has worked in Vietnam’s securities market for 15 years since its start-up in 2000.

Securities market rises to new heights

HOSE Chairman Tran Dac Sinh (right) and Minister of Transport Dinh La Thang (middle) at the IPO of the Vietnam Airlines Corporation at HOSE - Photo: Ba Thuy

What do you think are HOSE’s biggest achievements over the past 15 years and 2015 in particular?

2015 marked 15 years of HOSE and the Vietnamese concentrated securities market. I think there have been five major achievements.

First, we have established a concentrated securities market which has gathered leading businesses. The securities market has proved its role as an effective source of capital. From only two listed companies and several securities companies at the start-up, HOSE currently has more than 300 kinds of listed shares, 80 member securities companies, 1.5 million investor accounts and total market-value capital of almost US$50 billion accounting for almost 30 percent of the gross domestic product (GDP).

Second, after 15 years of operations, the securities market has become increasingly transparent and effective as a result of the application of international standards on company and risk management. HOSE has closely monitored securities and listed companies in terms of reports and statements in order to ensure equality and close observation of regulations.

Third, HOSE has pioneered advanced services. Specifically, it launched continuous order matching in 2007, online transactions in 2009 and extended the transaction and ordering time in 2012 in an effort to increase market liquidity. New products such as the HOSE-Index and ETF index sets were unveiled providing more tools and utilities for investors. HOSE is currently preparing to launch the Covered Warrant product.

Fourth, HOSE has invested almost US$40 million in infrastructure which is scheduled for completion in 2016-2017. This will be the newest technology in Vietnam integrating the securities, bond and derivatives markets.

Fifth, HOSE has inproved its profile and highlighted the Vietnamese securities market in the regional financial market. It has also become a bilateral and multilateral partner of many stock exchanges and major financial organizations in 20 countries worldwide including four in the G7 group. HOSE is also a founding member of the initiative to ally ASEAN stock exchanges and an official member of the Asian and Oceanian Stock Exchanges Federation (AOSEF). It has also recently joined the Sustainable Stock Exchanges (SSE) Initiative.

HOSE has set up a perse index system in the last two years such as VN30, VNMidcap, VNSmallcap, VN100, VNAshare and HOSE-TRI and scheduled to launch GICS in the first quarter of this year. What impacts do they have on the Vietnamese securities market?

The HOSE-Index set has been welcomed by investors as it more specifically reflects various segments of the market.

We already have the VN30 for large-sized businesses, VNMidcap for medium-sized businesses and VNSmallcap for small-sized businesses.

VFM has used VN30 as reference for the first ETF fund listed at HOSE in 2014.

Recently a South Korean fund proposed that HOSE copyright the VN30 in order for them to build a listed ETF in the Republic of Korea.

HOSE is scheduled to launch HOSE-ESG Indices or Green Index at the end of this year or in early 2017. We will learn experiences from German experts in establishing and commercializing indexes and designing sustainable development criteria.

What should be done to upgrade HOSE from a frontier market to an emerging market this year?

Upgrading the market is an important step to develop the Vietnamese securities market to improve its image and attract international capital flows.

According to MSCI, Vietnam is a frontier market and needs to improve a number of issues related to foreign investors’ ownership, market accessibility, transparency, liquidity and the scale of capital. 

In terms of capital and liquidity, we believe that HOSE and the Vietnamese securities market in general can meet these requirements. However, we need to implement the remaining criteria following a specific itinerary.

As for HOSE, we have driven towards upgrading it, developing many new services to increase the scale of listing and liquidity, encouraging companies to post their shares, improving infrastructure and information technology, strengthening its monitoring role to ensure transparency, reducing administrative paperwork, and creating open and transparent mechanisms to facilitate investors.

What would you like to share with investors?

We are stepping into a new period of deeper integration, institutional improvement and restructuring the economy and the securities market. Once Vietnam makes the most of the opportunities and strengths, the securities market will rise as well. I also hope that market members are sufficiently well-prepared in terms of human resources, technology and knowledge in the coming time in order to successfully join a common playing field.

MSCI has described Vietnam is a frontier market. The country will need to improve a number of issues related to foreign investors’ ownership, market accessibility, transparency, liquidity and the scale of capital.

 

Minh Long

Theo ven.vn