Advertisement
In this episode of Prop Personalities, we sit down with Hars...
Luxury real estate is one of the most talked-about segments ...
Welcome to Prop Personalities by Prop News Time - a podcast ...
Airports play a much bigger role than just enabling travel -...
Why does the same hotel brand operate multiple properties in...
Vietnam is considering a set of measures to stabilise its stock market after a sharp decline triggered by global geopolitical tensions linked to the Iran conflict. Proposals include setting up a government-backed stabilisation fund, easing share buyback rules, tightening trading limits, and managing media messaging. Authorities have been directed to review these recommendations, which also aim to support the real estate sector and secure a potential market upgrade by FTSE Russell. The moves come as investor sentiment weakens and the benchmark index records one of the steepest falls in Asia.
Vietnam is preparing a series of measures to support its stock market following a sharp correction in share prices amid global uncertainty linked to the Iran conflict, according to documents reviewed by Reuters. Advertisement
The proposals include setting up a government-backed stock market stabilisation fund, offering incentives for corporate share buybacks, tightening trading limits, and using influencers to improve investor sentiment. These recommendations were submitted by the Ministry of Public Security to Prime Minister Pham Minh Chinh in the past week.
The move comes after Vietnam's benchmark stock index recorded a decline of around 6.5% in a single session in early March, reflecting rising investor concerns over fuel supply disruptions and broader economic risks. Vietnam relies heavily on oil imports from the Gulf region, making it vulnerable to geopolitical tensions.
Subsequently, the Prime Minister's office directed the finance ministry and the central bank to review and act on these recommendations. However, the extent to which these proposals will be implemented remains unclear.
Vietnam's stock index declined by about 9.3% over March, placing it among the worst-performing markets in Asia during the period. The market showed slight recovery, closing marginally lower after news of the proposed measures became public.
The Ministry of Public Security, which is not traditionally responsible for financial policy, has played a key role in shaping these proposals. Its influence has increased in recent years, especially after its former head assumed a top leadership position within the ruling party.
The document indicated that the recent fall in the stock market was viewed by authorities as an overly negative reaction from investors, prompting the need for corrective measures and potential restructuring of market mechanisms.
Vietnam's stock market, currently valued at around USD 300 billion, is under review for an upgrade from frontier to developing market status by FTSE Russell, with a decision expected on April 7. Authorities are concerned that ongoing volatility could impact this upgrade.
As part of the proposals, the stabilisation fund would intervene during periods of heavy selling by purchasing shares. The fund is expected to be financed through taxes and fees collected from securities transactions, although its size has not been specified. Sources suggest that regulatory limits on public spending may restrict the scale of the fund.
Additional measures include tax and fee exemptions to encourage companies to buy back shares and to support investment funds during market downturns. Authorities have also suggested narrowing daily trading limits to 3-5% from the current 7-10% to reduce volatility.
The proposal further includes temporary suspension of trading during extreme selloffs and increasing the cap on margin lending by brokers to 7-10% of their capital, up from the current 5%, to improve liquidity in the market.
Alongside financial measures, the government is also considering steps to manage market sentiment. This includes directing media coverage to maintain stability and encouraging influencers to share positive views about the stock market.
The document also highlighted concerns about economic growth targets, noting that sustained market weakness could affect Vietnam's goal of achieving 10% annual growth through 2030. In this context, the central bank has been advised to examine the possibility of lowering interest rates, particularly to support the real estate sector, which remains a key contributor to the country's economy.
These developments reflect broader trends across Asia, where governments and central banks are taking steps to stabilise financial markets amid external shocks. Countries like South Korea have already announced large-scale interventions, including bond buybacks, to address similar challenges.
Source Reuters
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
