Competent authorities prioritize short-term solutions to support a stable market. Source: Internet

Prioritize short-term solutions to support a stable market

Talking to the press, a representative of the State Securities Commission said that the domestic stock market was going through a period of strong adjustment due to the combined impact of domestic psychological factors, especially risks from the international markets such as the Fed raising interest rates sharply, unresolved geopolitical tensions, inflationary pressures, a sharp increase in input prices, especially energy prices.

According to the leader of the State Securities Commission, Vietnam's stock market was still highly expected to recover and grow again in 2022 and the following years. However, in the context that the market might still have strong fluctuations, regulatory agencies are giving special priority to short-term solutions to help stabilize the market and reassure investors.

The State Securities Commission, the stock exchanges, and the Vietnam Securities Depository also met with many market members and securities companies to assess the current situation of the market as well as discuss short-term and medium-term solutions to help the market overcome difficulties. This year, there will be positive changes, which are expected to support the market to increase liquidity as well as information transparency in the market.

The representative of the State Securities Commission affirmed that they were closely monitoring the developments of the economic-political situation, and policy movements of countries around the world, assessing the impact and influence on the Vietnamese stock market in order to promptly take appropriate solutions to stabilize the domestic stock market.

At the same time, actively disseminate information in order to stabilize investors' sentiment, strengthen the confidence of market participants and the public investing at home and abroad in the determination of the Party, State and Government and the Ministry of Finance in stabilizing the macro-economy, developing a transparent, public, safe and effective stock market.

Improve the legal framework for the stock market

In the medium and long term, leaders of the State Securities Commission (SSC) said that the management agency was actively completing the legal framework for the stock market, completing the formulation of a stock market development strategy by 2030 to clearly define goals, solutions and roadmaps for long-term stock market development.

Along with that, SCC would review, evaluate and summarize to recommend the shortcomings in the legal framework on securities and the stock market (including the Law on Securities and the system of guiding documents), especially regulations on the transparency of corporate information, rights and responsibilities of participants, sanctions for law violations on the stock market in order to protect investors, thereby restoring confidence and ensuring the transparency and sustainability of the stock market.

“In the future, we will have more solutions to improve operational efficiency, service quality, financial capacity, and professional ethics of service providers in the market, especially securities companies, independent auditing companies, fund management companies, operations of the system of asset valuation companies, credit ratings, accounting and auditing; strictly managing and supervising while facilitating and promoting the role of those organizations to provide transparent, safe and effective services for both issuers and investors,” SSC’s leader said.

Regarding foreign capital flows, besides solutions to attract the participation of foreign investors, the State Securities Commission is also accelerating solutions to shorten the process of upgrading Vietnam's stock market from Marginal to Emerging.

The upgrade will depend greatly on market rating organizations, however, the State Securities Commission is coordinating with relevant agencies to agree on solutions, map out a clearer roadmap, and strive to upgrade the level of the Vietnamese stock market as soon as possible, reaching the target set by the Government.

In addition, SSC will strengthen dissemination and investor training to increase the knowledge base of finance and securities, and support investors to participate in the stock market more safely and professionally.

According to developments on the stock market, from the beginning of April, the market has experienced a strong correction and decrease.

As of May 12, the VN-Index closed at 1,238.84 points, having lost 285.86 points, equivalent to a decrease of 18.7% compared to the peak set on April 4, 2022.

Market liquidity tended to decrease continuously during this period, accordingly, the average trading value in April reached VND26,299 billion/session, down 15.6% compared to the average in the first quarter of 2022. In the early sessions of May, the liquidity only averaged VND18,916 billion/session, down 28% compared to the previous month's average.