ASEAN Capital Market Development Initiative

(Baonghean.vn) - With the aim of further promoting the implementation of ASEAN initiatives on capital market integration after the formation of the ASEAN Economic Community (AEC), on November 18, the State Securities Commission (SSC) in coordination with the Asian Development Bank (ADB) organized the Workshop on ASEAN Capital Market Development Initiatives towards promoting AEC integration.

The workshop was attended by speakers who are senior experts from capital market regulators of ASEAN countries. The speakers discussed a number of outstanding initiatives within the framework of the ASEAN Capital Market Forum (ACMF) and the implementation of these initiatives in practice. The ACMF initiatives presented at the workshop included: the ACMF action plan towards regional capital market integration in 2020; (ASEAN Trading Link, and the ASEAN Corporate Governance Scorecard - ASEAN CG Scorecard.

ASEAN capital market integration is a topical and practical topic. The morning session is for market regulators of Vietnam and the group of countries with developing capital markets including Brunei, Laos, Cambodia and Myanmar; the afternoon session focuses on the content of initiatives from the perspective of market members. The workshop is a good opportunity to exchange and share experiences for capital market regulators, while aiming to raise market members' awareness of the ASEAN integration process.

Ms. Nguyen Thi Lien Hoa, Vice Chairwoman of the State Securities Commission, said: “Over the past 20 years, there have been over 1,000 companies listed on the capital market. The State Securities Commission has made efforts to lay the foundation for the development of the Vietnamese stock market to integrate with the international market. The practice of participating in cooperation has shown the opportunities, benefits and challenges, including the capital market, for the Vietnamese stock market.”

Overview of the workshop.

According to data from the State Securities Commission, from September 2012 to August 2016, the trading volume via the ASEAN Trading Link connection reached more than 1 billion units. However, individual ASEAN capital markets are small-scale markets with limited product and service range, relatively illiquid, high transaction costs and large spreads between equity investment yields and risk-free interest rates, due to fragmented trading volumes. Therefore, ASEAN markets need to cooperate on par with developed markets to attract investors and ASEAN issuers to consider choosing ASEAN markets.

According to Ms. Nguyen Thi Lien Hoa, the capital markets of ASEAN countries are still quite small in scale and have low liquidity. Therefore, applying initiatives between countries such as Cambodia, Laos, Malaysia and Vietnam will contribute to attracting investors and developing a highly integrated capital market. To do this, Ms. Hoa believes that in addition to the active cooperation of financial institutions to narrow the development gap, countries with lower capital market development need to make more efforts.

Agreeing with this view, Mr. Eric Sidwick, Country Director of the Asian Development Bank (ADB) in Vietnam, said that countries have shown strong efforts towards developing the region's capital market. With the formation of the AEC in 2015, countries all want to integrate more strongly. However, in reality, there is still a gap in development between countries, in which Singapore and Thailand develop more strongly. Therefore, other countries must make more efforts to overcome these difficulties and challenges, and need to see the importance of promoting cross-border cooperation and investment in the region.

The SSC and ADB hope that the workshop will be an opportunity for countries to learn from and promote each other. At the same time, ADB is committed to continuing this process for a more harmonious and unified region with free movement of capital and human resources. This will help reduce transaction costs, avoid asymmetry in information, and create a suitable investment environment; thereby, we can see the ideas on developing ASEAN capital markets with full urgency in the current difficult period./.

Red River