Vietnam’s stock market regulator, the State Securities Commission (SSC), will focus on stabilizing the stock market this year, SSC Chairman Vu Bang said Wednesday.


Bang told a press briefing in Hanoi that many foreign financial firms predicted that the market, which plummeted 66 percent last year, will rally in the third quarter.


“But we [SSC] expect the entire 2009 will be a challenging time for the stock market,” he said. “First we will focus on stabilizing and restructuring the market and setting up long-term plans for its development.”


SSC will speed up the process of opening an exchange for unlisted stocks and setting up a bond market, Bang said. The regulator will also look at connecting domestic stock markets with regional Asian counterparts.


The bond market should open in the second quarter of the year, Bang revealed. “We are considering whether to allow lending against bonds and lending against some stocks,” he said, adding the SSC planned to keep a closer eye on auditing firms that audit listed companies.


SSC will limit its intervention in the stock market, Bang said. “The market now relies on the economy, not investor sentiment. So the possibility of intervening in market, in ways such as adjusting the daily trading, is low,” he said.


SSC adjusted the daily trading band four times last year in an attempt to stop the market’s free-fall. The current band is 5 percent.


Vietnam’s 338 listed companies attracted VND29 trillion (US$1.65 billion) last year, only 23 percent of 2007’s figure, according to Bang. The market capitalization last year reached VND225 trillion ($13 billion), accounting to 17.5 percent of the country’s gross domestic product.


Bang also said the combined value of foreign investors’ portfolios was now only $4.6 billion, a decrease of $4 billion from early last year. But he said the decline was not worrying as foreigners had mainly only sold bonds and highly liquid stocks.