VASB proposes tax cut to increase trading liquidity

VASB proposes tax cut to increase trading liquidity

The move aims to encourage investors to increase their activity on the Vietnamese securities market amid the spread of novel coronavirus (COVID-19) and its impact on the global economy, Ky told Dau tu Chung khoan (Securities Investment) newspaper.

The VASB will suggest Ha Noi and Ho Chi Minh stock exchanges cut trading fees for brokerage firms, then the companies will consider doing the same for investors, he said.

The association will also propose the National Assembly consider tax cuts for the securities sector so the market may flourish in 2020, he said.

“The targets set for the securities sector in 2020 may not be achieved if no measures are carried out,” Ky said.

According to Bao Viet Securities Co.’s general director Nhu Dinh Hoa, the Government should think about a tax cut and tax free policy for investors.

Such a policy is a support of the Government for investors amid the volatility of the global market and economy, he said.

The policy will encourage investors to stay with the Vietnamese market and become more professional, he added.

Solutions to improve the quality and efficiency of the Vietnamese securities market must be done in 2020, especially those that were issued years ago but have remained undone, he said.

Investors and companies expect market regulators will receive and process their ideas in a better manner, Hoa said.

The biggest challenge for the securities market and investors is margin lending interest, according to business insiders.

Investors will suffer more if the market keeps going down as their assets become cheaper than their initial purchasing prices while they still have to pay to keep their portfolios active, they said.

The current market condition is pretty harsh and it would be difficult for companies to increase the number of new active investors, they said, adding many active investors have closed their accounts while some others are waiting for more signals to close theirs.

Administration, foreign limit

Besides taxes, improving administrative procedures is one of the key issues that has weighed on the local market, according to Nguyen Hoang Hai, general secretary of the Vietnam Association of Financial Investors (VAFI).

A slow-moving administration will hamper the chance of success for companies, even kill many of them, especially those in the real estate sector, he said.

Amid the existing difficulties, the Government needs to put administrative reform on top, really cares and supports the business community with its utmost enthusiasm and passion so that local companies and local market can develop, Hai said.

Foreign investors should also be allowed to increase their ownership in local public companies, he suggested.

If local firms are able to raise more foreign capital, they can reduce their dependence on the banking sector and the capital cost in the economy will get lower, he said.

In 2020, the market is expecting the Government’s large-scale divestment from State-owned enterprises. If the cases are done successfully, more foreign investors will appear in Viet Nam and provide the Government a new flow of cash to invest in infrastructure projects, he said.

Some SOEs being enlisted for divestment in 2020 include the Vietnam National Petroleum Group (Petrolimex), the Airports Corporation of Vietnam (ACV) and national carrier Vietnam Airlines.

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