03/04/2026

FRIDAY | APR 3, 2026

17

BIZ & FINANCE

Vietnam plans measures to support stock market

what they have for use in key industries and sectors. Vulnerable countries in Asia and Africa have flagged several issues of concern to the bank. “They’re calling out the income shock that will be created due to rising prices, what that will mean for households and businesses,“ said Donohoe. In addition to the shock of lower energy availability – which can lead to a drop in economic output – there are also concerns about food security related to fertiliser supply chains being frozen. In Africa, South Asia and the Middle East, the IMF warned that a number of countries were already struggling with meager foreign reserves and “limited market access“, making them vulnerable to“dangerous”debt shocks. – AFP SEOUL: South Korea’s economy is on a “wartime footing” over the Iran war, President Lee Jae Myung said yesterday, after the government proposed a US$17.2 billion supplementary budget to tackle the crisis. Oil prices have surged amid the US-Israeli war on Iran, raising growth and inflation risks for South Korea, which is heavily reliant on Middle Eastern crude for around 70% of its imports. “Our government is treating the economy as being on a wartime footing and is making all-out efforts to overcome the crisis,“ Lee said in a budget speech to the National Assembly. “The current crisis is not like a passing shower that will stop, but rather like a massive storm that could last indefinitely,“ he added, asking lawmakers to swiftly pass the budget. The plan allocates 4.8 trillion won (RM12.5 billion) in cash handouts of 100,000 to 600,000 won per person for the bottom 70% of income earners, with payments scaled by income. It also includes 2.8 trillion won in support for young people and low-income earners, and 2.6 trillion won for companies affected by the crisis in the Middle East. “Extraordinary measures are needed in times of emergency,“ Lee said. Like other Asian economies, South Korea relies heavily on energy imports, including through the Strait of Hormuz, whose effective closure has driven up energy prices and rattled the global economy. The war has already prompted Seoul to impose a fuel price cap to ease pressure on its energy supply, the first such measure since 1997. The country’s Energy Ministry recently issued guidelines urging the public to conserve energy, including by taking shorter showers and charging mobile phones during daytime hours. “I earnestly appeal to the public to actively participate in energy conservation practices in daily life, such as using public transportation and saving electricity,“ Lee said yesterday. – AFP South Korea president says economy on ‘wartime footing’

HANOI: Vietnam is planning measures to support its stock market and has proposed the establishment of a government-backed stabilisation fund, after sharp declines in share prices due to the Iran war, according to documents seen by Reuters. Other potential actions listed in the March 17 proposal by the Ministry of Public Security to Prime Minister Pham Minh Chinh include incentives for corporate share buybacks, limiting daily trading bands and using influencers to promote positive messaging. The proposals were made in reaction to a 6.5% drop for Vietnam’s benchmark stock index on March 9, the document said. The prime minister’s office instructed the finance ministry and the central bank on March 25 to act on the recommendations, according to a separate document. It was not immediately clear, however, to what extent the recommendations will be adopted. The contents of the documents are being reported for the first time by Reuters. None of the ministries or state institutions cited in this article immediately responded to requests for comment. Vietnam’s benchmark stock index tumbled 9.3% in March, making it one of Asia’s worst-performing share markets, as investors fret about fuel shortages and the wider economic fallout from the war. Vietnam sources most of its oil from the Gulf. The proposed measures highlight the growing challenge Asian economies are facing in safeguarding their capital markets in the face of the turmoil from the war. South Korea announced a 5 trillion won (RM13.3 billion) o Stabilisation fund, trading curbs and media control proposed, document shows

People walk past the Hanoi Stock Exchange. – REUTERSPIC

Middle East, snarled key supply chains and sent energy prices soaring. The World Bank offers development assistance and immediate budgetary support to member nations in the form of loans and technical assistance. Donohoe said the organisation was currently offering both forms of support in talks with countries in need. “We are extremely concerned regarding the effect that this will have on inflation, on jobs and on food security,“ he said. “That is why we will put in place responses that have a financing element and a policy element that can and will be of support.” Discussions regarding financial options – which could take the form developing market from “frontier” status by index provider FTSE Russell in a review due on April 7. The proposed measures are aimed at reducing the risk that current market volatility could delay the upgrade to its market status, the document said. The proposed “stock market stabilisation fund” would buy shares during episodes of heavy selling and be financed with taxes and fees on securities transactions, the ministry document said. It did not mention how big the fund might be. The fund was likely to be of limited size because of Vietnam’s restrictions on the use of public money, said a person familiar with the proposal who declined to be identified as the plan has not been publicly disclosed. Share buybacks could be facilitated through exemptions from taxes and fees, and similar waivers should be applied to investment

emergency bond buyback last week while central banks in the region have had to dig deep into their toolkits to support their weak currencies. The sharp decline in Vietnamese stocks is “an excessively negative reaction from investors that necessitates a restructuring of the market”, according to the document from the ministry which oversees the police. The ministry is not responsible for economic or financial policy, but it has become increasingly influential since its former head, To Lam, became secretary-general of the ruling Communist Party in 2024, the country’s most powerful role. Chinh is expected to retire as early as next week and a new government will be formed, but policies are unlikely to be changed. Vietnam’s stock market, worth some US$300 billion, is widely expected to be reclassified as a

of were “underway“, but were not expected to conclude for “a number of weeks.” On the policy advice front, Donohoe expected talks to wrap up “in a few days’ time.” Since the start of the war, Tehran has virtually blocked the key Strait of Hormuz, through which roughly a fifth of the world’s crude oil and liquefied natural gas – and one-third of its fertilisers – pass. Much of that is bound for Asian countries, which have seen energy flows abruptly dry up, as prices spike and supplies shrink. Several countries – including top World Bank borrowers Pakistan, Indonesia and Bangladesh – have implemented widespread fuel-saving measures to address the crisis, saving immediate loans – funds that buy shares during market downturns, the document said. It urged the use of influencers to spread “positive statements” about the market and called for tighter direction of the domestic press – already under state control – to reassure public opinion during financially sensitive periods. It also proposed narrowing daily trading bands to 3–5% from the current 7–10% and suggested temporarily halting trading for “a few sessions” during extreme selloffs. The ministry also called for increased caps for brokers extending margin loans to investors, allowing them to lend up to 7-10% of their capital, instead of the current limit of 5%. Noting risks to the party’s target of 10% annual growth through 2030, the document also asks the central bank to “study the reduction” of interest rates for the real estate sector, a major driver of economic growth. – Reuters

World Bank official ‘extremely concerned’ by fallout of Iran war

WASHINGTON: The World Bank is “extremely concerned” about the

coordinate aid responses to the war. Donohoe flagged that countries in

effect the war on Iran will have on inflation, jobs and food security, and is in talks with member states on how to address immediate needs in the crisis, a top official told AFP on Wednesday. The comments by managing director Paschal Donohoe ( pic ) came as the World Bank announced a new partnership with the International Monetary Fund

Asia and Africa were particularly vulnerable to the energy, price and supply-side shocks of the crisis. “At the moment, we are consulting with many governments and countries in relation to what their needs will be, and I would anticipate within the next number of weeks that will become far clearer,“ Donohoe said. The US and Israel

launched strikes on Iran on Feb 28, igniting a war that has engulfed the

(IMF) and International Energy Agency (IEA) to