Vietnam bans credit organisations to lend money to affiliate securities companies for trading in securities. The ban was clearly stated in a decision signed by Governor of the State Bank of Vietnam, Le Duc Thuy on January 20.

Credit organisations are permitted to lend money to non-affiliate securities companies provided that these companies have property to guarantee their loans.

Loans or financial guarantees to securities companies whose capital is contributed and managed by banks, will not exceed 10 percent of their capital, the decision said.

Meanwhile, loans and guarantees to other securities companies must be below 20 percent of their capital.

"Setting this limitation is necessary," Governor Thuy said, adding that the move is aimed at preventing the danger of facing bankruptcy and inability to secure payments by banks at a time when the securities market is overheating.

According to Thuy, many investors have used up to more than 50 percent of their loans to purchase shares on the securities market, which posted an average growth rate of 30 percent within a month.

Together with the decision by the State Bank of Vietnam, the State Securities Commission said it will employ a score of measures to ensure sustainable and healthy growth for the securities market.

The commission will regularly send inspectors to securities companies to track down signals of spied transactions and encourage them to publish their 2006 financial reports.

The commission will also increase its monitoring of the publication of information by listed companies on the market, as well as transactions of listed shares.