Những chuyện “THÂM CUNG BÍ SỬ” về ngày thị trường chứng khoán Việt Nam ra đời | Spiderum

Key Concepts

• Thị trường chứng khoán (Stock Market): A platform for buying and selling securities, such as stocks and bonds.
• Đổi mới (Doi Moi): Vietnam's economic reform policy initiated in 1986.
• Hạt giống đỏ (Red Seed): A metaphor for a pioneer or foundational figure in a new field.
• Thị trường vốn (Capital Market): A financial market where long-term debt and equity-backed securities are bought and sold.
• Kinh tế thị trường định hướng xã hội chủ nghĩa (Socialist-oriented market economy): Vietnam's economic model that combines market mechanisms with socialist principles.
• Cổ phần hóa (Equitization): The process of converting state-owned enterprises into joint-stock companies.
• Công ty chứng khoán (Securities Company): A financial institution that facilitates the trading of securities.
• Quỹ đầu tư (Investment Fund): A pool of money from many investors to invest in securities like stocks, bonds, and money market instruments.

The Pioneering Journey of Vietnam's Stock Market

This video chronicles the arduous and ideologically challenging journey of establishing Vietnam's stock market, a concept initially viewed with suspicion as a product of capitalism. It highlights the visionaries and their efforts to convince the political system of its necessity.

The Visionary: Dr. Le Van Chau

The narrative centers on Dr. Le Van Chau, described as the "red seed" of the capital market. His journey began with assignments to work with international financial institutions in the US. He later faced high-level Party and State leaders to address ideological questions about building a stock market in a socialist country.

• Background: Dr. Chau was chosen after the reunification of Vietnam to develop the capital market. In 1977, he was sent to the US to represent Vietnam at the World Bank and International Monetary Fund (IMF) annual meetings. His selection was personally reviewed by Prime Minister Pham Van Dong and approved by Deputy Prime Minister Pham Hung, who vouched for his political acumen and expertise, honed through his banking career and wartime experience in the B29 organization.
• Post-War Economic Challenges: Following the Sixth Party Congress, General Secretary Nguyen Van Linh grappled with economic recovery. Decades of war and a centralized planned economy had depleted national resources. The decline in aid from the Soviet Union and Eastern European socialist countries exacerbated the need for effective capital mobilization.
• International Experience: By 1987, after a decade of engagement with international monetary organizations, Dr. Chau was nominated by the State Bank of Vietnam to serve as the acting Executive Director for the World Bank, holding a position on its board.

The Historical Meeting and Ideological Debate

During a visit to Vietnam, Dr. Chau was urgently summoned to Ho Chi Minh City for a crucial meeting with top leaders, including General Secretary Nguyen Van Linh, President Vo Chi Cong, and Prime Minister Pham Hung.

• The Mandate: Prime Minister Pham Hung tasked Dr. Chau with explaining the US economic and capital market management systems to the leadership.
• Dr. Chau's Presentation: He detailed his decade-long observations, explaining the US federal and state governance structures, capital raising through government bond issuance, and the pivotal role of the stock market in funding economies and businesses.
• Early Recognition of Capital Mobilization: This meeting underscored that the leadership was already contemplating methods for capital mobilization for national development, aligning with the spirit of "Doi Moi" and international integration.

Proposing the Stock Market: Overcoming Skepticism

Dr. Le Van Chau proposed establishing a stock market when most experts were still focused on national bond issuance.

• Return to Vietnam and the 1991 Meeting: After his term at the World Bank, Dr. Chau returned to Vietnam in 1990 as Deputy Governor of the State Bank. In a January 1991 meeting chaired by Chairman of the Council of Ministers Do Muoi, discussions on capital generation continued. While bond issuance was suggested, its limited effectiveness was apparent.
• The Stock Market Proposal: Dr. Chau proposed the stock market as a necessary step for a developing market economy. However, the concept was alien to the public, experts, and even policymakers. The association of "stock market" with "capitalism" generated significant hesitation and doubt.
• The Politburo Meeting: A critical Politburo meeting in 1991, attended by key figures like advisor Pham Van Dong, General Secretary Do Muoi, and Prime Minister Vo Van Kiet, addressed the stock market proposal.
  • Pham Van Dong's Question: "Comrade, please tell the comrades in the Politburo why we, as a socialist country, must build a stock market?"
  • Do Muoi's Follow-up: "What is the class nature of the stock market?"
• Dr. Chau's Response: Dr. Chau understood the leaders' intent was to hear his perspective as a builder of this market. He explained that the stock market is a human construct that, when operated correctly and aligned with societal goals, yields practical economic benefits. He asserted that Vietnam, as a socialist country, possessed the knowledge and experience to build a stock market within a socialist-oriented market economy framework. This answer convinced the Politburo.
• The "How-To" Question: The next question was about the method of construction. Dr. Chau emphasized building it "our way, the Vietnamese way," tailored to Vietnam's conditions, institutions, and technological base.
• International Learning and Local Adaptation: The research team studied international markets like Japan, South Korea, Thailand, Taiwan, China, ASEAN countries, the UK, and the US. They also engaged with global financial institutions like Merrill Lynch and Nomura. Crucially, they found a valuable reference in a 1974 document prepared by the Saigon government for establishing a stock market.
• Government Approval: The proposal was presented to Prime Minister Vo Van Kiet in early 1994. Dr. Chau noted internal skepticism regarding macroeconomic conditions, financial systems, equitization progress, and incentive policies. The fear of national reputational damage from a failed stock market was a concern.
• Leadership's Intent: The leaders' questions were not for information but to gauge the perspective of those involved and build consensus. Dr. Chau emphasized the consistent message from the research team and economists about the necessity of a stock market in a socialist-oriented market economy. Pham Van Dong's concluding remark, "I asked to see what you thought about this issue, but if you say so, then Vietnam must do it," signified approval.

The Establishment of the State Securities Commission

On November 28, 1996, the government issued Decree 12-CP establishing the State Securities Commission (SSC). Dr. Le Van Chau was appointed its first Chairman, a decision that caused considerable concern among his peers and family due to the perceived risks of venturing into an unprecedented and volatile field.

• Dr. Chau's Rationale: He believed that a market economy, by definition, requires a stock market.

Laying the Foundation: Equitization and Market Goods

A prerequisite for the stock market's operation was the availability of "goods" – listed securities. This necessitated accelerating the equitization of state-owned enterprises (SOEs).

• Slow Equitization: By the late 1990s, SOE equitization was slow, hindering the listing of companies and the market's launch.
• Mobilizing Companies for Listing: In 1999, the SSC dispatched officials, including Ms. Vu Thi Kim Lien, to persuade joint-stock companies and private enterprises to list their shares.
• Transparency Challenges: Listing required companies to disclose information, submit financial reports, and undergo independent audits. This transparency was a significant hurdle for many businesses in 1999-2000, who were accustomed to operating with less public scrutiny.
• Business Hesitation: Ms. Lien recounted a director's candid remark: "When you talk, the stock market is indeed very attractive. But when the whole economy is murky, and you ask me to list and be transparent, it's like asking me to jump into the light for everyone to scrutinize. Other businesses in the dark, no one knows what they do, and even tax incentives are not as attractive as obscurity."
• Obstacles in SOEs: The deep-rooted subsidy mindset in SOEs presented further challenges. In one instance, a company director, after a presentation on public share auctions, excused himself to meet with a central official who opposed the proposal. This highlighted limited understanding and resistance to transparency even at higher management levels, with some fearing the loss of personal power.
• Skepticism from Leaders: The Chairman of a large state-owned corporation openly stated, "I don't see any benefit from the stock market. My company needs capital, the budget provides it, if we lack money, the Enterprise Development Fund offers low-interest loans, and we can borrow from banks without collateral. Why go to the stock exchange and have to be public and transparent, causing trouble?"
• Slow Progress in Hanoi: The plan to open the Hanoi Stock Exchange was also delayed, primarily because most Northern businesses were SOEs or operated as closed entities even after equitization, lacking the scale for listing.

Determination to Launch

Despite these difficulties, the SSC remained committed to launching the stock market in 2000, after completing the infrastructure for the Ho Chi Minh City Stock Exchange.

• Initial Listings: By the launch date, 14 companies had agreed to list.
• Dr. Chau's Resolve: Dr. Chau, with Deputy Chairman Nguyen Duc Quang, decided to proceed with the launch in 2000, reaffirming commitments to the Party and Government. He stated, "Any failure, I will be the one to take responsibility with the Party and the State."

Building Intermediary Institutions: Securities Companies

The initial plan was for major state-owned commercial banks to establish securities companies. However, Dr. Chau advocated for a more dynamic approach, encouraging private sector participation from the outset, aligning with the Party and State's policy of promoting private enterprise.

• Private Sector Inclusion: Despite some opposition, Dr. Chau insisted on having at least one private securities company, with the future prospect of foreign-invested enterprises.
• Saigon Securities Company (SSI): This vision materialized on December 30, 1999, with the establishment of Saigon Securities Company (now SSI), one of the first three securities companies and the first private one in Vietnam.

Attracting Foreign Investment and Funds

Developing investment funds and attracting foreign investors were identified as key priorities even before the market's opening.

• Dragon Capital: Dragon Capital, established in 1994 with an initial capital of $16 million, was the first foreign investment fund licensed by the SSC. It has since grown into one of the largest fund management companies.

Conclusion: A Legacy of Transformation

The establishment of Vietnam's stock market was a profound transformation, not just in economic policy but also in the mindset of leaders and key personnel.

• Shifting Perceptions: The video highlights how the concept of the stock market evolved from skepticism to acceptance, with some initially suggesting each province should have its own market, demonstrating a lack of understanding but a willingness to create change.
• The "Conquering New Lands" Metaphor: Dr. Le Van Chau's "carrying swords to conquer new lands" metaphor aptly describes the pioneers' journey into uncharted territory, driven by intellect and unwavering belief.
• Enduring Impact: Their legacy, with its triumphs and complexities, has created a platform for millions of investors. Every trade executed today carries echoes of those early, challenging days.
• "Lòng tham và lý trí" (Greed and Reason): The book "Lòng tham và lý trí, những quan sát tâm lý qua 25 năm người Việt đầu tư chứng khoán" (Greed and Reason, Psychological Observations Over 25 Years of Vietnamese Stock Investment) is presented as a compelling chronicle and a deep psychological lens into the 25-year journey of Vietnam's stock market. It offers insights into leaders, tycoons, victims of market crashes, and crucially, the psychological traps influencing investor decisions. The book is promoted as a way to support the Spider Room team.