The VN Index declined to its lowest level in the last three years to 351 in late December, and on January 7 closed even further to 336.73, fluctuating at around 350 last week, with poor liquidity for most listed companies. Last week, deals by several large companies, including Sacombank (STB), helped lift trading volume and the index.
The deputy head of the National Commission for Financial Supervision, Le Xuan Nghia, said major foreign investors expected improvement in liquidity, better quality of listed securities and expanded room for foreign investors, all of which could be the driving force behind effective attraction of investment capital.
"The national commission has proposed that the Government consider several solutions, based on investors' expectations as well as the need for a healthy and sustainably restoration of the stock market," said Nghia. He emphasised the need for offering more room for foreign investors.
Currently, foreign investors can hold up to 49 per cent of the total equity of a joint-stock company, with the rate coming down to 30 per cent in case of a joint-stock bank.
As for higher securities quality, Nghia wanted a rapid divestment of State-owned capital in enterprises in which the State would not need a dominant stake, apart from the speeding up of equitisation of major and effectively operating State-owned companies.
"It is important that the proportion (of total equity) be higher for the public when they offer their Initial Public Offerings (IPOs)," said Nghia, explaining that the insignificant rates of 5-7 per cent allocated to the public in the past would not help attract major foreign investors.
These investors also wanted equitisation of major State-owned enterprises to occur with listing on the stock market in order to increase transparency.
"The Prime Minister has instructed the Ministry of Finance and the State Securities Commission to study recommendations and make specifications for the Stock Market Restructuring Plan," said Nghia.
The detailed plan is currently at the final stage of completion for submission to the Prime Minister for approval in the first quarter. Thus, the market-support solutions are expected to be implemented in the second quarter, in combination with market-restructuring measures, according to Nghia.
New year for real estate sector
This year a number of companies and individuals were expected to be able to capitalise on opportunities in the real estate market caused by tough market conditions experienced in 2011, said Marc Townsend, managing director of property service provider CBRE Viet Nam, speaking at a seminar in HCM City recently.
"A number of sectors have seen prices declining, with some prices declining for over three years. There has been pain in the market, with cash flows being challenged as restrictions on capital flows came into place and buyer appetite faded," he added.
He quoted President Obama's former Chief of Staff Rham Emanuel, who once said, "You never want a serious crisis to go to waste."
Townsend added that the decline in prices had been a crisis for some, but an excellent opportunity for others.
He also expected foreign investment in real estate to increase notably in 2012 as investors close in.
Unified bankcard centre approved
The State Bank of Viet Nam has won approval from the Government in principle for its project to integrate bank-card networks into a new unified-card switching centre this year. The move targets to save costs and create a common policy on management and development of non-cash payment services.
Once the centre is in operation, holders of cards issued by one bank will be able to use their cards on automated teller machines (ATMs) and points of sales (POS) run by all other banks.
Currently, there are three card alliances in Viet Nam, all of which are joint-stock companies: VNBC (Vi Na Brilliant Card), Smartlink and BanknetVN, with a total of almost 13,000 ATMs. VNBC is led by Dong A Bank, and Smartlink by Vietcombank. These two banks are Viet Nam's card technology leaders.
Meanwhile, the State is the major stakeholder in BanknetVN, owning 25 per cent. It is represented by the State Bank of Viet Nam.
Smartlink General Director Nguyen Tu Anh said competition among independent companies was the driving force for development, citing telecommunication companies as a typical example.
She, however, said that if it was for the nation's sake, she would agree on integration, with the condition that the State Bank take charge of ensuring transparency, market growth and benefits for related partners, members and customers. She also wanted the State Bank to work out as soon as possible a specific route for the plan.
VNBC's chairman Le Tri Thong also expressed his support for the need for a reasonable route, with agreement from the three companies.
The State Bank has asked VNBC to begin its link with BanknetVN early this year, but Thong said that was nearly impossible. He said it would take at least several months because of technical requirements.