Rumors, manipulation plague Vietnam markets

Many tickers have been pushed up to new peaks without improvement in business results, with many companies failing to submit their earnings in time, Minister of Finance Ho Duc Phoc informed the National Assembly in a recent report.

"The stock market is still in an early stage of development and is therefore heavily affected by investor sentiment. Rumors, fears of cash flow and inflation pressure have caused the market to plunge recently."

Vietnam’s benchmark VN-Index hit this year’s bottom on May 16, the lowest in 11 months.

The plunge came after VN-Index increased by nearly 36 percent last year as one of the best performers globally.

The number of new stock accounts opened last year alone equaled that of the previous 10 years.

But the market turned bearish in April and has struggled to recover since.

Phoc is also concerned about risks faced by a speeding corporate bond market.

Many amateurs who fail to meet government criteria have cheated to secure bonds, made possible by the violations of commercial banks and stock brokerages, he said.

One typical example involves property developer Tan Hoang Minh, whose chairman Do Anh Dung was arrested in early April on suspicions of "fraudulent appropriation of assets," he added.

Governor of the State Bank of Vietnam Nguyen Thi Hong called for more thorough solutions to prevent future violations.

In the long run, the government needs to make the corporate bond market a key capital mobilization channel for the economy, she added.

Phoc said changes will be made to tighten regulations on bond issuances, listed on a dedicated market for corporate bonds.