An investor places an order on the trading floor of Bao Viet Securities Co. (Photo: VNA) The State Bank reported that by the end of April 2022, credit forsecurities investment and trading accounted for about 0.5 percent of the totaloutstanding loans of the economy, 98 percent of which were short-term loans,focusing mostly on outstanding loans to invest in Government bonds.
In order to control risks related to securities and corporate bonds and toensure the safety of the credit institution system, the State Bank is graduallycompleting a legal framework with stricter regulations to control risks in bondinvestment activities of credit institutions while enhancing thesafety of the system.
The State Bank will strengthen the inspection, examination and strictsupervision of credit granting in the securities sector and corporate bondinvestment by credit institutions in order to promptly detect any potentialhidden risks and take appropriate measures.
According to the State Bank, this agency has directed credit institutions toreview and reassess credit granting, strengthen risk management measures, andimprove the effectiveness of internal inspections.
The risks in the securities market mostly arise from the operations ofbusinesses listed on the market and bond issuers. Therefore, it isnecessary to have comprehensive and synchronous coordination among relevantministries and branches to filter and consolidate the stock market as well asthe corporate bond market.
In addition to the positive results, the recent rapid growth of the stockmarket and the bond market had created potential risks such as the phenomenonof price manipulation in the stock market and risks in the corporate bondmarket, said Pham Hong Son, Vice Chairman of the State Securities Commission atthe seminar on Development of Capital Market and Real Estate Market in theframework of the 4th Vietnam Economic Forum, held recently in HCM City.
He said many investors, especially individual investors, did not fullyunderstand the law on investment and transactions of individual corporatebonds, adding that the quality of service providers had not been in uniform.
This posed a requirement for the management agency including the Ministry ofFinance and the SSC, to further promote measures to manage, supervise and makesome adjustments and modifications.
Son said the SSC would continue to maintain market management to ensure safeand transparent operations and protect the legitimate rights and interestsof investors.
“First, SSC will continue to improve the legal framework for the market in thedirection of enhancing transparency, developing stably and sustainably,” hesaid.
In the immediate future, the SSC will be active in putting new regulations andpolicies into the Law on Securities and guiding documents into practicewhile continuing to improve the legal framework, focusing on completingthe development strategy of the stock market to 2030.
SSC will also promote the equitisation and divestment process ofState-owned enterprises.
For the government bond market, it will develop a standard market meeting thedemand for capital mobilisation for the State budget and supporting therestructuring of the budget and public debt in a safe and sustainabledirection, ensure the mobilisation of resources for the socio-economicdevelopment plan and the economic recovery.
For the corporate bond market, SSC is focusing on developing a transparentsecondary market, building market standards, clearly separating between bondsissued to the public and privately issued.
Son added: "In the immediate future, the SSC is actively directing andcoordinating with the stock exchanges and the Securities Depository Center inbuilding and putting into operation the trading floor for private issuedcorporate bonds; promoting the public supervising the use of money from bondmobilisation and information disclosure and bond trading on the Hanoi StockExchange's information disclosure system."
The SSC will continue to restructure securities companies and fund managementcompanies according to the project approved by the Prime Minister, review,classify, develop plans for each company to take appropriate measures, researchand digitalise financial assets on the stock market, apply financialtechnologies, improve the quality and professional ethics of the team ofsecurities practitioners.
For auditing organisations, price appraisal organisations, credit ratingagencies, SSC will coordinate with units of the Ministry of Finance to improvethe morality and quality of services of these organisations; encourage serviceproviders on the stock market to implement fintech applications./.
VNA
