Answering the question of why Vietnam has become an attractive destination for foreign investors, Hung said: "A country with 90 million people and a government that considers business sector growth engine are main reasons attracting investors."
"Vietnam stock market is divided into two periods, one is the preparation for joining World Trade Organization (WTO) and the other is the period from 2016 to 2021," he said.
"Looking back over 10 years as Vietnam was preparing to join the WTO, the conference that we held in Japan attracted more than 300 different investors, funds, and companies who were already interested in Vietnam market," he recalled.
"A country with a population of 90 million and a government that considers business sector growth engine are main reasons attracting investors."
Nguyen Duy Hung, Chairman of the Board of Directors of Saigon Securities Inc. (SSI)
That is the story of 10 years before Vietnam joined the WTO. With expectations of investors, a huge amount of capital has been poured into Vietnam market. At that time, stock and real estate prices went up day by day. The speculative economy began to be formed along with the unsustainable economic growth.
"The scale of the stock market was very modest at that time with only a few listed companies. When the large amount of money poured into the stock market, it suddenly turned to be a turmoil. Everyone thought that raising money or making money was easy, hence, many businesses assumed that the stock issuance solely could bring back a lot of money without putting any effort neither in enhancing the managament capability nor allocating investments effectively," he said.
Then 'what goes around comes around', the market witnessed many emerging serious problems: bad debt, low liquidity and a shrinking banking system.
Fortunatly, the Vietnamese government has acknowledged that all and come up with proper solutions, which opened up the second phase of the capital market development.
"In this phase, the government has changed its role in the market, which I believe the driving force of the economic growth. Accordingly, the government now does not play the role of mobilizing and allocating resources but only directing market forces through policies, so that the economic sectors can distribute the resources by themselves. Indeed, the priciple, which has been applied widely, helps to boost the economic efficiency," Hung said.
The achievements up to now have been highly appreciated, especially when it comes to the equitization of SOEs and the IPO plans of large SOEs. Inspite of several existing issues of the banking system and the resource allocation process, the macroeconomic indicators are being well evaluated.
"These positive outcomes are not just immediate effects, it is the long-term confidence of investors in Vietnam's economic growth potential," Hung emphasized.
