A number of companies and agencies have expressed their desire to postpone the implementation of Circular 36 after the State Bank of Viet Nam declared its urgency.

The working banking group of the Viet Nam Business Forum 2015 noted that the deadline by which the circular goes into effect was too tight for the banks, which could cause a shock to the market. Circular 36, which is scheduled to take effect on February 1, regulates the new limits on the operational safety of financial institutions.

In fact, the market has already seen an impact from the decision, as shown in the 11 per cent decline of the VN Index since the announcement of the circular.

According to Pham Hong Hai, chief executive officer of HSBC Viet Nam, the stock market is affected by many factors. These range from general domestic economic strategies to international economic movements and are not confined to issues involving monetary policies.

Therefore, the circular alone is unlikely to address the problems, he said.

Other CEOs from Bao Viet Securities and Tan Viet Securities shared this view.

"Although I totally agree with the new regulations, the abruptness of the circular made investors panic," Bao Viet Securities' CEO Nhu Dinh Hoa stated.

Meanwhile, chief secretary Nguyen Thanh Ky of the Viet Nam Association of Securities Business alleged that the application of the circular in the present situation would impose an adverse impact on critical aspects of the economy. For instance, the equitisation of state-owned firms and restructuring of weak banks would be challenging.

The association has also planned to propose a suspension. Ky hoped that the central bank would provide a more appropriate roadmap for the circular.

The chief secretary disclosed that the liquidity of the market is increasing. Maintaining this momentum and the interest of stock investors would significantly boost the equitisation of state-owned enterprises as well as their divestment under the will of the government. 

VNS