Strong capital market needs technology development

Strong capital market needs technology development

In the financial system, the capital market must play a central role, not only in providing financial resources, but also creating confidence for investors, say experts.

The Government can consider allowing technology enterprises to conduct IPOs and list on the stock markets without being bound by the condition of ‘no accumulated losses’. Photo baochinhphu.vn

Việt Nam needs a strong financial system to help the country meet its goal of becoming a centre for developing the digital technology industry with at least five digital technology enterprises on par with those of developed countries by 2030, experts said.

In the financial system, the capital market must play a central role, not only in providing financial resources, but also creating confidence for investors, helping develop domestic private enterprises and international financial centres and contribute significantly to double-digit growth.

According to the Deputy Head of the National Assembly (NA)'s Economic and Financial Committee, Phạm Thúy Chinh, it is necessary to innovate thinking in building laws on the capital market for innovative start-ups to both ensure management requirements and encourage the development of science, technology, innovation and national digital transformation.  This resource, together with public financial resources, will ensure the economy achieves double-digit growth.

In order to realise this policy, Chinh said that in the legislative agenda of the NA’s 9th meeting, the NA will continue to perfect laws such as the State Budget Law, Investment Law, and Science and Technology Law. At the meeting, the issue of mobilising social financial resources for science and technology development, innovation and digital transformation is also being discussed.

Leading technology countries such as the US, China and Singapore all have developed capital markets, allowing technology start-ups to raise capital through initial public offerings (IPOs) and create unicorns valued at more than US$1 billion.

In Việt Nam, although the start-up ecosystem has developed strongly, the number of unicorns is still limited due to obstacles in support mechanisms, especially in clearing capital flows. By the end of 2021, Việt Nam had four recognised technology unicorns including VNG, MoMo, VNLife (VNPay) and Sky Mavis, ranking it third in Southeast Asia, after Singapore and Indonesia.

Sharing lessons from successful capital raising deals in the international market, Nguyễn Ngọc Anh, general director of SSI Asset Management, said Việt Nam needed to improve the efficiency of the capital market. With the characteristics of having no collateral, it was difficult for technology companies to have access to bank loans. This was a huge barrier for them to develop.

The Director of the Institute for Digital Economic Development Strategy (IDS), Dr Trần Văn, said there should be a breakthrough policy so that technology enterprises could mobilise domestic capital. He suggested that the Government could consider allowing technology enterprises to conduct IPOs and list on the stock markets without being bound by the condition of ‘no accumulated losses’ or have a sandbox for the policy to apply in pilot in international finance centres that are under construction in HCM City and Đà Nẵng.

Dr Nguyễn Đức Kiên, former Deputy Chairman of the National Assembly’s Economic Committee, proposed that, in the current context of Việt Nam, management agencies needed to create appropriate mechanisms and policies for leading technology enterprises to bring their experience to become both investors and companions to start-ups. 

Bizhub