Vietnam To Focus On Stabilization Of Stock Market - Official

First Published Thursday, 9 September 2010 08:49 am - © 2010 Dow Jones

HANOI -(Dow Jones)- Vietnam will use flexible monetary policies to support the country's stock markets, which have attracted VND700 trillion ($37 billion) in investment by the end of August, a senior government official said Thursday.

"The government will soon focus on stabilizing the stock market by using the flexible and loose monetary policies and interest rates," State Securities Commission Deputy Chairman Nguyen Doan Hung told a government conference in Ho Chi Minh City.

The government has previously said it is planning a 20% increase in money supply this year. By the end of August, money supply growth was 16.3% from the end of last year.

In an effort to boost foreign investment in the local market, Hung said Vietnam's Securities Law will be amended next year to allow foreigners to own more than 30% of the shares of domestic banks. The foreign ownership cap on banking stocks was introduced when the country launched its bourse in 2000.

Hung said in addition to introducing financial measures to help the market grow, the government will also continue to boost the economy by curbing inflation and boosting the transparency of the stock market.

Currently, Vietnam's two bourses in Hanoi and Ho Chi Minh City have 580 listed companies, up from 457 at the end of 2009. The number of investors registered to trade stocks has risen to 966,500, up from 822,000 by the end of last year, SSC figures showed.

Vietnam's key index has fallen 6.3% so far this year, compared with a 56.8% rise last year. It just rebounded last week after falling 17% over the past two months on news that banks will keep high interest rates and many companies are preparing to issue new shares.

-By Nguyen Pham Muoi, Dow Jones Newswires; 84-4-35123041;phammuoi.nguyen@dowjones.com