Nearly two dozen finance experts from five Asian countries met last week in a regional workshop aimed at improving the regulation of securities markets.
On the first day of the four-day workshop, experts from Malaysia and India, both of which established their securities markets years ago, discussed challenges of daily operation of stock markets.
The following days were dedicated to helping officials from Cambodia, Laos and Vietnam supervise capital markets.
Cambodia plans to open its stock market in December, with Laos hoping to follow next year. Vietnam has had a decade to build its own exchange but has faced problems.
John Zinkin, CEO of the Securities Industry Development Corporation, said the workshop was the best opportunity for the three countries to find solutions to their individual challenges in advance.
“If you are a developed economy, where you’ve had capital markets for a very long time, people say, OK, we lost some money now and will invest again,” he said. “But when you have a new capital market in emerging countries, if people have a bad experience, they don’t have confidence, and they won’t come back to the market.”
Suy Sokraksmey, an official in the research and training department of Cambodia’s nascent Securities and Exchange Commission, said his five-member team had found shortages in human resources, law enforcement, fair markets and people’s confidence.
Vathana Dalaloy, a securities regulator for Laos’s securities commission, said her main concern was preventing market manipulation on time.
Vietnam’s market had grown quickly since 2006, said Duong Thi Phoung, a member of the surveillance department of the State Security Commission of Vietnam. Both Ho Chi Minh City and Hanoi have markets, with 500 companies and 300 million trades daily.
However, she said, the Vietnamese stock market faces regulation violations, stock manipulation and orders of stocks without the informing of security firms, all a result of weak regulations and insufficient power in the securities commission, which can’t take direct action.
By comparison, Malaysia, which has had a successful securities market since the 1960s, has strong regulation, with its securities commission able to take direct action. This has included the removal of five companies from its listing.
Suy Sokraksmey, a member of Cambodia’s securities commission, said he was not sure that Cambodia, with its lack of human resources and inexperience in the markets, could follow the Malaysian model.
The finance experts will now have three months to ponder solutions to the issues raised last week and are expected to present their findings in Malaysia in February 2010.