The Ministry of Finance is determined to comprehensively restructure the financial market this year to address its shortcomings and ensure sustainable development
Many
changes would be made to financial laws this year to make them more effective
and create close linkages between industry and the monetary and financial
systems, they said, explaining these are meant to enable enterprises to raise
capital from both overseas and domestic sources.
Management
and supervision of authorised agencies would be improved in ways that ensure
the safety of the securities market and ensure national financial security,
they said.
For
the insurance market, they said the ministry would unveil policies to encourage
companies to enter the agriculture, forestry and fishing sectors, and reach out
to rural and remote areas that have a large number of low income earners.
The
markets for bonds, shares and financial derivatives would be restructured to
ensure they operate in line with international regulations and global and
regional markets, they said.
The
ministry also plans to pay more attention to developing capital supply channels
and expand the list of investors, particularly financial institutions.
The
Government bond market will be developed with the objective of making interest
on the bonds a benchmark for interest rates in the capital, financial and
monetary markets.
The
ministry will ask financial market administrators to improve the transparency
of policies and provide sufficient and timely information to investors.
The
expectations are that these steps will improve the liquidity of the products
and services available in the markets.
The
ministry will direct and monitor the financial market through the legal system
and indirect tools, and its financial management agencies have the task of
establishing warning systems to ensure the security and effectiveness of
financial and monetary markets as well as the insurance and real estate
sectors.
Viet
Nam's financial and monetary markets have grown considerably over the years but
the growth has not been stable, according to analysts.
Ngo
Van Tuan, director of the ministry's Department of Banking and Financial
Institutions, said many limitations have become apparent in these markets over
the years, rendering them vulnerable to fluctuations in outside markets.
He
cited 2009 when the country's economy was hit by the global economic recession
and its financial market was influenced significantly.
According
to the ministry, VND200 trillion (US$10 billion) worth of bonds were needed
last year but the bond market could supply only VND20 trillion and $470
million.
The
securities markets was capitalised at VND669 trillion, three times higher than
the 2008 figure. However, only around VND17.7 trillion was mobilised through
the local securities market, VND2 trillion lower than the 2008 figure.
One
of the financial market's biggest problems is its inability to raise or
distribute capital efficiently.
Many
of the Government's important plans to restructure the economy did not get
enough funds to be executed on schedule, Tuan said.
The
securities market was also unstable because of a lack of orientation, experts
said, pointing out that most individual investors blindly followed the herd
without doing proper research and planning.
Capital
mobilisation channels like the real estate and gold markets were not well
managed due to poor co-ordination between relevant agencies, they said.
Companies
supplying financial services were not very competitive because their products
were of low quality and lacked variety, they added.
Source: VietNamNet/Viet Nam News