Friday, 19 Jan 2018
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ECONOMYBANKING & FINANCE

Vietnam’s stock market capitalization to GDP reached 70%

Updated at Tuesday, 09 Jan 2018, 11:02
The Hanoitimes - The target for Vietnam’s stock market capitalization by 2020 is 70% of GDP. However, the Ministry of Finance informed that Vietnam’s stock market has achieved this target in 2017.
Specifically, for the stock market, the Ministry of Finance has completed the revised draft Law on securities, issuing Decree No. 71/2017/ND-CP regarding the corporate governance applicable to public companies, which is effective from August 1, 2017, as well as launching the derivatices market  since August 2017. At the same time, the government also put effort in attracting foreign investors through loosening room and simplifying the registration procedures.
 
Vietnam's stock market capitalization achieved the target of 70% GDP set for 2020.
Vietnam's stock market capitalization achieved the target of 70% GDP set for 2020.
In 2017, Vietnam’s stock market capitalization reached nearly 70% of GDP, up 80.5% compared to the year- end of 2016. With this result, the Ministry of Finance informed that the stock market has achieved the target set for 2020. For the insurance market, total revenue for the sector is estimated at VND 105.6 trillion (roughly US$ 4.6 billion), an increase of 21.2% over the last year’s figure; total asset value reached VND 302.9 trillion (roughly US$ 13.3 billion), up 23.4%; reinvesting to the economy of VND 247.8 trillion (roughly US$ 10.9 billion); insurance premiums totaled around VND 29.4 trillion (roughly US$ 1.3 billion), up 14.9%.

On the process of state-owned enterprises (SOEs) restructuring, the Ministry of Finance stated that state corporations and economic groups have accelerated the implementation process. As of December 20, equitization plans for 47 SOEs have been approved with total value of nearly VND 336 trillion (roughly US$ 14.7 billion). Effort in divesting state fund of SOEs resulted in VND 2.27 trillion (US$ 100 million), with revenue of VND 4 trillion (US$ 176 million). State Capital Investment Corporation (SCIC), a state owned holding company with objectives of representing the state capital interests in enterprises, completed the divestment process in 40 enterprises for VND 21.6 trillion (US$ 950 million). In particular, the successful selling of 343.66 million shares of Saigon Beer Alcohol Beverage (Sabeco), the Vietnam’s leading beer producer with value of nearly US$ 4.8 billion proved the market is having positive responses from the govenrment’s effort. 

With regard to the restructure of the state budget and public debt, the Ministry of Finance informed that in period 2016 – 2017, the capital mobilization for state budget is estimated at 24.6% of GDP, while the domestic revenue is equivalent to 81% of state budget, up 13% compared to period 2011 – 2015. In term of the allocation of state budet in 2017, the investing for development is of 26 – 27% (up 1 – 2% compared to period 2011 – 2015), regular expenditure of 64 – 65% (a reduction of 3%); the average budget overspending is estimated at 4.28% of GDP (this rate is reduced to 3.5% of GDP in 2017).

In the coming time, the Ministry of Finance stressed the importance of continuing the restructuring effort of state budget, for which the target of domestic revenue in 2018 is set at 83.3% of state budget; investing for development accounts for 26.2% and regular expenditure at 64.1% of total expenditure. 

As of December 31, 2017, Vietnam’s public debt is at 61.3% of GDP, the government debt of 51.6% of GDP, which is below the 65% ceiling set by the National Assembly.
Nguyen Tung
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