VNStockNews.com - The VN Index declined to its lowest level in the last three years to 351 in late December, and on January 7 closed even further to 336.73, fluctuating at around 350 last week, with poor liquidity for most listed companies. Last week, deals by several large companies, including Sacombank (STB), helped lift trading volume and the index.
The deputy head of the National Commission for Financial Supervision, Le Xuan Nghia, said major foreign investors expected improvement in liquidity, better quality of listed securities and expanded room for foreign investors, all of which could be the driving force behind effective attraction of investment capital.
"The national commission has proposed that the Government consider several solutions, based on investors' expectations as well as the need for a healthy and sustainably restoration of the stock market," said Nghia. He emphasised the need for offering more room for foreign investors.
Currently, foreign investors can hold up to 49 per cent of the total equity of a joint-stock company, with the rate coming down to 30 per cent in case of a joint-stock bank.
As for higher securities quality, Nghia wanted a rapid divestment of State-owned capital in enterprises in which the State would not need a dominant stake, apart from the speeding up of equitisation of major and effectively operating State-owned companies.
"It is important that the proportion (of total equity) be higher for the public when they offer their Initial Public Offerings (IPOs)," said Nghia, explaining that the insignificant rates of 5-7 per cent allocated to the public in the past would not help attract major foreign investors.
These investors also wanted equitisation of major State-owned enterprises to occur with listing on the stock market in order to increase transparency.
"The Prime Minister has instructed the Ministry of Finance and the State Securities Commission to study recommendations and make specifications for the Stock Market Restructuring Plan," said Nghia.
The detailed plan is currently at the final stage of completion for submission to the Prime Minister for approval in the first quarter. Thus, the market-support solutions are expected to be implemented in the second quarter, in combination with market-restructuring measures, according to Nghia.
