Tuesday, July 13, 2004
Vietnam plans to launch second stock market next year
Associated Press Hanoi (Vietnam), July 13
Vietnam is preparing to launch the Communist country's second stock market early next year in Hanoi, government officials said on Tuesday.
The government is speeding up efforts to start the market with 10 to 20 listed companies next year, deputy-chairman of the State Securities Commission, Vu Bang told Dow Jones Newswires.
"The government is determined to develop Hanoi as a key financial center in the coming years, and the operation of the stock exchange here will help boost the efficiency and transparency of the economy," Bang said.
Setting up the Hanoi Securities Trading Center is key because the country is expected to have about 3,000 joint stock companies by the end of next year, up from 1,700 currently, said deputy head of the Ministry of Finance's Financial Research Institute, Nguyen Dang Nam.
"With such a huge number of firms, which will seek ways to raise funds for their operations in the coming years, our financial market will certainly see a very strong growth soon," Nam said.
A survey by Hanoi's Association of Industries and Traders showed that each year local businesses need about 70 trillion dong ($4.5 billion) for their investment plans, but banks can meet only 20 per cent of that figure.
Vietnam started its privatization program in 1992. The country now has about 1,200 shareholding companies which were former state-owned enterprises, along with about 500 joint stock companies set up by private investors.
The local government plans to privatize more than 2,000 state-owned companies in the next two years. Vietnam launched its first postwar stock exchange in Ho Chi Minh City in July 2000, but trade there has developed slowly, with shares of only 24 companies -- that have a combined market capitalization of 2 trillion dong ($127 million) -- currently offered to investors.
© HT Media Ltd. 2004.