Their assessment is grounded on the fact that mechanisms and policies aimed at boosting the development of the securities market continue to be built and improved.

The two biggest stock exchange centres in Vietnam- the Ho Chi Minh Securities Trading Centre (HSTC) and the Hanoi Securities Trading Centre (HOSTC) have to date had nearly 200 types of shares listed with a total market capitalisation amounting to US$14 billion. While intermediate financial regulations on the Vietnamese securities market are becoming more effective and diversified, foreign investors hold up to 49 percent of shares. As many as 55 foreign securities companies and 18 fund management companies have been licensed to operate in Vietnam with a total investment capital of approximately US$4 billion.

However, according to Director of the Dragon Capital Investment Fund John Shrimpton, it is essential to create more high-quality goods to keep the securities market’s operations purring along.

Last year’s total market capitalisation of the Vietnamese securities market reached only US$1.8 billion but the figure has jumped to roughly US$23 billion so far. The spectacular development of the securities market will help enterprises make correct decisions when listing their shares over the counter (OTC). However, the Vietnamese Government should issue more incentive policies to facilitate businesses’ share listing. In addition, it is important to accelerate the equitisation process of State-owned enterprises (SoEs) with the aim of launching more high-quality goods on the market, Mr Shrimpton said.

In the face of the securities market’s current development, increasing supplies of goods for the market is considered an effective measure. If other measures relating to capital management, tax and profit are properly implemented, the market’s operation will be stable, not too hot or too cold.

Regarding new prospects of the Vietnamese securities market which will see many major companies having their shares listed, Manager of the Dragon Capital Investment Fund’s Research Section Fiachra Mac Cana said equitisation of large enterprises such as Vietcombank, Sacombank and telecoms firms in the coming time will be interesting things for the Vietnamese securities market. However, the crux of the matter is how to effectively control capital inflows into Vietnam and how to disburse them as a lot of foreign investors have poured millions of US$ into the market over the past three or four months.

Importantly, the Vietnamese Government should strictly control capital sources with the aim of encouraging foreign investors to run long-term investment and keeping the market development stable. With favorable conditions of the macro economy and active participation of large companies, the Vietnamese securities market will strongly develop in the future, thus ensuring supply-demand, Mr Mac Cana noted.

According to investors’ assessment, Vietnam’s political stability is of great importance to national development while the Vietnamese Government is making every effort to renew institutions so as to increase the transparency and publicity of public finance and services to provide business opportunities for domestic and foreign investors.

Director of BNP Parisbas Bank in charge of the Southeast Asia region and India Jean Piere Bernard said Vietnam is considered a lucrative market as the national economy has achieved high and rapid growth over the past years. However, the Vietnamese Government should intensify investment in developing infrastructure facilities to meet the requirements for high economic growth. Vietnam is striving to raise total investment in economic development to 40 percent of the country’s GDP in the coming time. To reach this goal, it is necessary to call for investment through capital inflows from the securities market and bond issuance while reducing bank loans since they are mostly short-term borrowings.

Inflows of foreign investment capital into Vietnam is an advantage but also a challenge. The question is how to accelerate the implementation of commitments and building of synchronous legal regulations to sharpen the economy’s competitiveness, Mr Bernard said.

Vietnam needs around US$140 billion for investment and development in the 2006-2010 period with a focus on the following specific activities: First, building a national financial system strong enough to regulate the macro economy, maintaining the GDP contribution rate of 21-22 percent to the State budget and keeping budget overspending at a rate of 3 percent of GDP and national debt under 50 percent of GDP. Second, ensuring the transparency and publicity of economic and financial policies and renewing financial policies to develop the market economy and improve the business environment of all economic sectors. Third, accelerating the equitisation process of State-owned enterprises, reinforcing financial management of State capital in enterprises, encouraging the development of private economic sectors to diversify forms of ownership and ensure equal treatment to all economic sectors. These effective measures will give fresh impetus to stimulating the development of the financial market, including the Vietnamese securities market.