Derivatives market set for this year launch

09:34 | 27/05/2016 Economy

(VEN) - The Hanoi Stock Exchange (HNX) has met all the necessary elements to be ready for putting the Vietnamese derivatives market into operation in late 2016.

Derivatives market set for this year launch

The derivatives market will be put into operation in late 2016

HNX Deputy General Director Nguyen Anh Phong said that the derivatives market is a financial market for futures, forwards, options or swaps linked to assets between two or more parties. It helps investors prevent risks with low initial costs, while many opportunities to make profits are offered. After putting the derivatives market into operation, the Vietnamese securities market will be improved and developed at a higher level, contributing to enhancing Vietnam’s position in the international capital markets.

The HNX is making greater efforts to improve trading system, complete designs of initial products and develop regulations on derivatives in order to issue in the third quarter of the year.

The HNX has selected simple designs for initial derivative products in order to create the most favorable conditions for investors to take part in. Future contracts of share indexes (HNX30 and VN30) and government bonds with five-year terms will be the first two products to be traded in the market. These two products can meet investment persification requirements and limit risks for investors.

A majority of market members and investment funds have paid special attention and actively cooperated with the HNX in the selection. Designs of future contracts of share indexes and government bonds with five-year terms have been submitted to the State Securities Commission, and they will cooperate with the Vietnam Securities Depository for approval.

Building trading system for the derivatives market has been considered hard work. The HNX has conducted studies and learned experience from leading experts at home and abroad to choose the right plan.

The HNX is working together with the Vietnam Securities Depository to complete technical infrastructure and promote information technology application in order to ensure efficiency and stability in operations. In addition, the HNX has actively trained market members with two training courses on derivatives while at the same time cooperating with international partners to organize seminars and programs in order to introduce about the derivatives market.

The HNX will continue to carry out intensive training programs for member units. On the basis of the volume of completed works, stock investors at home and abroad will be offered more opportunities in late 2016 after the derivatives market is put into operation.

A derivative is a financial instrument that derives its value or price from underlying assets such as stocks, bonds, currencies and interest rates, as well as commodities and market indices. The most common types of derivatives are futures, options, forwards and swaps.


Lan Ngoc