| Author | Vu Thi Phuong |
| Call Number | AIT RSPR no. SM-01-25 |
| Subject(s) | Stock exchanges--Vietnam
|
| Note | A research study submitted in partial fulfillment of the requirements for the degree of
Master of Business Administration, School of Management |
| Publisher | Asian Institute of Technology |
| Series Statement | Research studies project report ; no. SM-01-25 |
| Abstract | In an attempt to give a new impetus to the country's economic development, Vietnam
opened its first stock market in Ho Chi Minh City on July 201
h, 2000. In theory, this is
meant to serve as the capital market where cash-hungry enterprises (state-owned or
private) could obtain the needed resources to finance their business expansion strategies or
modernization plans. On the macro level, the country needs a platform where government
bonds could be sold for a longer maturity to provide large capital for big projects. The
establishment of a stock market is thus justified. However, its performance after half a year
in operation has shown little achievement as compared to its set objectives. Many reasons
have been quoted to blame for the slow moving evolution of the newly setup stock market,
such as: demand surpasses supply (only five listed companies so far); ineffective operation
as a result of obsolete infrastructure, and lack of well-trained and experienced staff;
incomplete and inconsistent legal framework, which necessitates state's intervention too
often and too long; slow progress in the equitization/ privatization state-owned enterprises,
which limits the number of potentially listed companies to the minimum, etc. Indeed, these
shortcomings seem to bear the same pattern of similar economies in transition, which
attempt to accelerate the process of national development and integration into the world
economy.
Against this background, the research study aims to analyze the reasons leading to the
disappointing results of the Ho Chi Minh Stock Exchange in the first phase of its existence
and development. As the main sources of analysis, the study was based on the official
reports and articles on the stock market development, observation on the trading floor, and
interviews of traders and officials concerned. On the basis of the study findings, some
recommendations are provided to develop the stock market in Vietnam.
It is virtually necessary to improve an overall financial market conditions that lay the firm
ground for effectively operating the capital market in general and the stock market in
particular. The enlargement of the number listings and speeding up the on-going
equitization process as well as further developing bond market need to be implemented. As
a complementary solution to give a boost to the poorly performing market at present, it is
suggested that an over the counter market should be soon organized. The building up
compatible technical facilities and better staffing for the stock market are also seen as a
prerequisite to make the stock market function well. These measures should go in-hand
with other improvements such as making the stock market more transparent and leaving
the market to determine the stock price by itself. Lastly, due consideration should be given
to completing the legal framework and promoting public education and investor awareness
on the benefits and functioning of the stock market.
It is believed that the experience learned from the country's first stock market in Ho Chi
Minh city, as presented in this study, will certainly serve as a frame of reference for the
second stock market to be opened soon in Hanoi, the capital of Vietnam. |
| Year | 2001 |
| Corresponding Series Added Entry | Asian Institute of Technology. Research studies project report ; no. SM-01-25 |
| Type | Research Study Project Report (RSPR) |
| School | School of Management |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration (MBA) (Publication code=SM) |
| Chairperson(s) | Tang, John C. S.; |
| Examination Committee(s) | Piman Limpaphayom ;Deussen, Ame; |
| Scholarship Donor(s) | Government of Norway ; |
| Degree | Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 2001 |