Vietnam bourse ready for business

The exchange is based in the old South Vietnamese parliament

Communist Vietnam has taken another tentative step into the stormy world of capitalism with the opening of its first stock exchange.

The Securities Trading Centre (STC) officially opened on Thursday in Ho Chi Minh City, Vietnam's traditional economic capital, but trading on the new bourse will not begin for another 10 days.

Officials say the new bourse will boost Vietnam's socialist economy

So far only two companies have been listed to trade and most of the initial transactions are expected to be in government bonds.

The opening of the stock exchange - which was initially proposed seven years ago - is the latest step in Vietnam's move towards a more open economy.

Last week Vietnam signed a landmark trading agreement with the United States giving Vietnamese goods full access to the US market.

The launch of the exchange has been repeatedly postponed because of a lack of suitable companies and concerns that it may hurt Vietnam's nascent financial system.

Trading bell

Initial trading sessions will take place on just three days of the week

Party officials including former premier Vo Van Kiet - one of the foremost advocates of Vietnam's economic reform programme - attended Thursday's opening ceremony, cutting a ribbon and ringing the bell on the trading floor for the first time.

"Though the operation of this STC is only in initial stages it has shown our firm determination to build ever uniform market components of the economy," Deputy Prime Minister Nguyen Tan Dung said at the ceremony.

STC Director Vu Bang said the exchange would serve as a new fund-raising channel for industrialisation and modernisation of Vietnam's "socialist-orientated economy".

The two privatised companies that will kick off business on the new exchange are Refrigeration Electrical Engineering, and Cables and Telecommunications Materials.

Free-market regime

What would Uncle Ho have made of it all?

Trading will be light to begin with - sessions take place on Monday, Wednesday and Friday only and for just three hours a day.

The new exchange is housed in the former parliament building of the defeated US-backed South Vietnamese Government.

Vietnam been gradually adopting free-market policies since the 1980s under a regime known as "doi moi" (literally, "renovation"), but dubbed by some commentators "market-Leninism."

To date about 400 of 5,900 state-owned enterprises have been sold off under a government privatisation programme, which was launched seven years ago.

Analysts say there has been some foreign interest in the Vietnamese stock market, but say its initial market capitalisation of between just $20m and $40m is unlikely to attract large scale foreign investment.