Vietnam Proposes Government-Backed Fund to Stabilize Stock Market Amid War-Induced Decline

Vietnam is taking steps to bolster its stock market following a sharp decline tied to the Iran war. Suggested measures include a government-backed stabilisation fund, corporate share buyback incentives, and enhanced media controls. These are part of efforts to reclassify the market as 'developing' from 'frontier'.

Vietnam is gearing up to fortify its stock market in the wake of a significant downturn linked to the ongoing Iran war. Reports indicate the government plans to establish a stabilisation fund, intended to curb extreme market volatility, according to documents acquired by Reuters.

The Ministry of Public Security has proposed several strategies, including incentives for corporate share buybacks and limiting daily trading bands. These measures aim to counteract a 6.5% drop on March 9. Prime Minister Pham Minh Chinh has directed the finance ministry and central bank to evaluate these recommendations.

This effort underscores the broader challenges Asian economies face amidst regional instability. The stabilisation fund is one among many measures, with potential use of influencers and stricter media control to maintain public confidence in a rapidly shifting market.

(With inputs from agencies.)