The stock trading board inside the Ho Chi Minh Stock Exchange (HoSE). In order to promote the healthy development of Viet Nam's stock market, it is necessary to diversify products on offer. — Photo HoSE

“Although the current Law on Securities stipulates a high level of sanctions for violations compared to the common ground, the maximum administrative fine is VND3 billion for organisations and VND5 billion for individuals. However, recent violations in the market have shown that these fines have not been strict enough, requiring a higher level of sanctions and tighter regulations,” said Ta Thanh Binh, Director of Market Development Department under the State Securities Commission.

At a seminar held late last week, Binh said the SSC will step up the improvement of human resources for inspection and supervision; as well as complete and put into use an upgraded transaction monitoring system with analysis, warning, and statistical features.

Binh said that SSC and stock exchanges will speed up the commissioning of the KRX trading system, provided by South Korea’s bourse operator, to facilitate the deployment of new products and services on the stock market and ensure the smooth, continuous, safe and effective of market operation.

“We are currently in the testing phase with the contractor to officially put the KRX system into operation. It is expected that when the new system is put into operation, it will help regulators as well as market participants deploy new solutions for transactions and payments that investors are looking forward to such as intraday trading, short selling, and shortening payment time," Binh said.

According to Binh, inflation has started to decrease in some economies such as the US and EU, and the roadmap to increase interest rates of central banks in some countries tends to slow down. As a result, the pressure on exchange rates and domestic interest rates will also gradually decrease. In fact, deposit and lending interest rates of many commercial banks have been adjusted down in recent weeks.

Domestically, the Government's determination in finding solutions to remove difficulties for the real estate market, stepping up the anti-corruption work, perfecting mechanisms, policies and laws, and reforming administrative procedures, will bring positive impacts to the Vietnamese economy, create a healthy and transparent business environment, and attract the participation of foreign investors, Binh said.

The return of foreign investors also showed that stock valuation was already at a suitable level compared to the strategy of foreign investors. This would be a positive signal for the Vietnamese economy and the stock market in particular, Binh said.

However, the domestic interest rate level, although showing signs of decreasing, is still at a high level and is likely to remain high at least until the end of the first quarter of 2023. Liquidity in the market is therefore likely to recover slowly. The international environment is also forecast to have many difficulties in 2023 when the prospect of slowing economic growth of some major economies will reduce the consumption demand for imported goods of the people of these countries, affecting the performance of Vietnamese exporters.

According to Can Van Luc, Chief Economist of BIDV, as for corporate bonds, it is important to note two important issues, which are collateral and credit ratings. The newly issued Decree 08/2023/ND-CP (Decree 08) is considered a solution to help remove immediate difficulties for the market.

Nguyen Tuan Anh, Deputy General Director of Vietinbank Securities, said that although Decree 08 has suspended the credit rating regulations, it is still necessary to encourage credit rating for all bond issuers. This should be considered an urgent task to help regain investor confidence and make the market transparent. Along with that, the participation of international and regional credit rating agencies should be encouraged.

In order to promote the healthy development of Viet Nam's stock market, Nguyen The Minh, analyst at Yuanta Vietnam Securities Company, said that it is necessary to diversify products on the stock market, promoting IPOs of State-owned enterprises in the oil and gas, telecommunications, power sectors, diversifying and improving investors' understanding. — VNS