Ministry proposes solutions to rally financial markets

Improving the liquidity of the financial market and mobilising investment while at the same time controlling the impacts of the global financial crisis were the major goals of a meeting that took place in Hanoi on Dec. 3.

Regarding the bonds market, the Finance Ministry reported that it has prioritised efforts to revise and complete the procedures for issuing Government and enterprise bonds. The ministry called for more diversification of bonds and pledged to create favourable conditions for enterprises to mobilise capital through the issuance of bonds.

Deputy Minister of Finance Nguyen Cong Nghiep unveiled a Government plan to issue 36 trillion VND worth of bonds during 2009, equivalent to 2008 estimates. The funds that are raised through the issuance will be invested in major community-based projects such as transport, irrigation, schools and medical facilities.

The Vietnam Shipbuilding Industrial Group (Vinashin) and the Vietnam Electricity Group have been given mandates to issue bonds of their own.

The Finance Ministry acknowledged that Government bonds issuance over the past ten months has met just 52 percent of the annual target due to the high rate of inflation.

Another capital channel, the stock market, is also attracting lots of attention after a series of complex developments throughout this year.

The nation’s largest bourse in Ho Chi Minh City saw its VN-Index drop 70 percent in November compared to its value in early 2007, despite a host of measures taken by the Ministry of Finance to arrest its decline. The Ministry said that the market is unlikely to rally in the short-term due to national macro-economic problems and the global financial crisis.

To date, almost 330 stocks and fund certificates have been listed on the stock market, with their total values making up some 19 percent of the gross domestic product (GDP).

The Finance Ministry has also proposed numerous measures relating to accounting, auditing and insurance services in an effort to maintain the insurance market’s annual growth rate of between 12-13 percent over the next two years.
Source: VNA