An analysis on the Vietnam's equity market.

• Main Authors: Sng, Ya Ying., Chang, June Tneg., Tran, Thanh Thuy.
• Other Authors: Gunter Dufey
• Format: Final Year Project
• Language: English
• Published: 2010
• Subjects: DRNTU::Business::Finance::Equity
• Online Access: http://hdl.handle.net/10356/35463
• Institution: Nanyang Technological University

The case study on the Vietnam’s equity markets is interesting as it is one of the by-products of the Vietnamese government’s efforts to revolutionize from a central-planned economy to a market-oriented economy. One may wonder what conflicts will arise when a capitalistic economy is governed by a communist government, especially when corruption remains serious in the country. While Vietnam has made many observable efforts to increase its stance in the global economic and political arena, such as becoming a member of World Trade Organization (WTO) in 2007, there are certain areas in which Vietnam should focus on increasing the value if its equity markets in the eyes of prospective investors. This research begins with setting a common presumption that efficient equity markets are important for economic growth. A brief description on the Vietnam’s equity markets is given to show the current conditions of the markets and to point out the channels through which foreign investors can invest in Vietnamese stocks. It is discovered that not only do they need to go through troublesome procedures; their investments are subject to limitations and risks arising from the ineffective legal framework and a lack of transparency. Subsequently, a more in-depth analysis is done on the Vietnam’s corporate governance mechanisms since this is the main issue found in this study. Finally, the paper ends with recommendations for Vietnam’s reform efforts and possible future research in this area.