Vietnam mulls setting up a stock exchange for startups

June 7, 2016

Vietnam is looking at the possibility of establishing a Stock Exchange particularly to help the rapidly growing number of start-ups, the country’s Deputy Prime Minister and former Finance Minister Vuong Dinh said on Tuesday.

According to a press release during a conference on “Developing the Capital Market for Startups” held in Ho Chi Minh City, it is very important for a successful Business Ecosystem to have a convergence of all critical systems allied to it. These critical systems ingredients are innovation, legal framework, infrastructure and support services, and participation of investors and financial institutions.

A statement was made mentioning that “Vietnam is in the early stage of forming that (Business) Ecosystem, and the greatest challenge we are facing is fundraising for the startups.”

The Financial Supervisory Commission added (as an emphasis to the possibility of establishing a Stock Exchange), “Thus, the formation of such an exchange will pay (pave) the way for extended funding,” The Commission sees the reluctance of investors in making significant investments due to lack of investor security measures. Such investors security measures should be in place in order to make the investment market secured.

“The Ho Chi Minh City Stock Exchange said it would take five years (to launch the exchange). But that is too long, and the government would want it to be done in two or three years,” Hue said.

In Asia, such an exchange for startups established in Korea which is the Korean New Exchange took three years and was finally established in 2013. Its establishment have attracted 90 listings which marked a remarkable three-fold increase on its first year of operation.

According to Tran Vinh Tuyen (Vice Chairman of Ho Chi Minh City Committee), the Vietnamese exchange is thought of being established in Ho Chi Minh city, a city which endeavors in becoming the start-up hub of the country as well as being the “Silicon Valley of Asia”. The southern city currently operates a startup investment fund with the initial size of VND30 billion ($1.34 million), which will be boosted to VND100 billion next year. “The fund is a stepping stone to call for more contribution of investors,” Tuyen added.