The main task of the State Securities Commission (SSC) for the immediate future is to provide more commodities, Deputy Head of SSC’s Market Development Division Nguyen Son said.

Analysts believe that the oversupply of securities was the main reason for recent market stagnation. Will SSC take action to limit supply?

It is undeniable that the increased volume of shares on the bourse with the appearance of ‘new faces’ has been affecting supply-and-demand of securities.

After the State Securities Commission approved the listing of several large companies, namely Vinh Son – Song Hinh, Sacombank, Sudico and Vinafco, the supply of securities has increased dramatically, that, to some extent, has led to price decreases.

However, the SSC does not have the right to intervene in an enterprises decision to list their shares on the bourse by issuing administrative orders. It is the right of any enterprise to decide their business operations, including listing on the bourse. SSC can not tell an enterprise to delay their plan to list, and can not force them to join the market if they do not want to.

Do you mean that the main task of SSC will continue to be provision of more commodities to the market?

Yes, I do. Raising securities supply is the main task in the long term strategy to develop the stock market. Although securities supply has increased considerably, the stock market is still too small when considering that the total stock market capitalisation is just 8% of GDP.

As the management authority, you can’t manage by instinct: to inject more commodities in the market when the prices go up and limit the commodities supply when the prices go down.

Basically, the market still needs more companies to list to stabilise.

What do you think the main reasons for the recent securities price decrease?

There are several reasons. Firstly, the securities prices held firm at the overly high levels for a long time, and it was quite normal to see the prices fall down to the more reasonable levels.

Secondly, as banks raise their interest rates and gold prices increase, investment in securities has become less attractive

Thirdly, Vietnam’s stock market is influenced by the world’s stock markets, which fluctuate against political uncertainties.

What measures will SSC take to ensure the market remains stable?

I must repeat that the SSC aims for healthy development of the stock market; therefore, it will not take tough handling of the market in order to raise or reduce supply/demand.

The SSC may recommend that listed companies use reserve capital to purchase shares in order to stabilise the market.

The SSC will also propose adjustment of regulations for the joining of foreign investors to the bourse in the aim of creating favourable conditions for foreign investors to become more involved in the market. Regulations on granting transaction codes to foreign investors will also be simplified.