Individual investors key to stronger market development

After 20 years of development, information transparency is still the key to protection of individual investors and stronger development of the securities market, SSI Securities Corp Chairman Nguyen Duy Hung said on Tuesday.

 

“Individual investors are the most vulnerable to any changes of the market so they should be protected,” Hung told an event held by the Vietnam Stock Journalist Club to celebrate the 20th anniversary of the Vietnamese stock market.

“It doesn’t mean showing investors how to trade, it’s about providing the market with standards, which are kept updated, so company information is transparent,” he said.

It is important for the regulators and government agencies to lure idle money from people to the stock market while making the market more attractive than bank saving, the SSI Securities Chairman said.

“I hope the Vietnamese securities market will soon approach international standards and credit rating agencies will better value it.”

The number of companies trading shares on the three markets – Ho Chi Minh Stock Exchange (HoSE), Ha Noi Stock Exchange (HNX) and Unlisted Public Company Market (UPCoM) – should increase and the listing of their shares will force them to clarify business information, he said.

Le Hai Tra, acting chairman of HoSE, said that securities firms have raised their equity capital by 41 per cent each year, equal to VND5.5 trillion (US$237.6 million) per year, since 2006.

“That is an amazing number but brokerages are still much smaller than listed commercial banks,” he noted. Each year, listed banks raise VND32 trillion worth of equity capital.

“Securities firms would have to increase their capital in the future so they are capable of offering higher quality products and services to investors,” Tra said.

According to individual investor Tran Tien Dung, total savings in the country are huge and people are unwilling to spend on securities products on worries about potential risks.

The total number of domestic accounts is now 2.5 million, but it is modest compared to Viet Nam’s total population of 100 million while the total number of saving accounts is much larger, State Securities Commission Chairman Tran Van Dung said.

That fact proves there is room for further development of the local securities market, but there will be much more difficulties, he said.

The SSC will upgrade its technological infrastructure and develop new products and policies to support investors and provide them with better market transparency, Dung said.

“It is vital to gain the trust from individual investors and the market regulators should perform better to establish an efficient legal framework for the market,” he said. 

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