15:37 | 29/12/2018 Finance - Banking
(VEN) - Investors have great expectations for growth and development of the Vietnamese capital market in the long term.
At the end of 2000, five companies were listed on Vietnam’s stock exchanges, with total market cap of VND986 billion. This figure increased to 748 companies by September 2018, while total market cap reached about VND2,656 trillion by October 2018. Government and corporate bonds have seen new development, with total market cap of more than VND1,100 trillion. This year has also recorded profits from stocks in banking, real estate, building materials, retail and some other sectors. The stock market has also contributed to promoting equitization of state-owned enterprises.
By September 2018, 2.1 million accounts were registered at the Vietnam Securities Depository (VSD), including 27,146 accounts of foreign investors. In the first eight months of 2018, the number of new accounts opened by foreign investors at the VSD reached 4,745, an increase of 40.1 percent compared to a year ago.
In addition, the upgrading of the Vietnamese stock market from the frontier market to the emerging market in Morgan Stanley Capital International’s watchlist is considered one of the important objectives. To achieve the goal, the State Securities Commission (SSC) is making greater efforts to improve the legal framework, diversify products, promote equitization and divestment of state-owned enterprises, restructure the stock market and enhance efficiency of management and supervision.
The launch of the derivatives market has also marked an important milestone in the development of Vietnam’s stock market. Vietnam has become the fifth country in the ASEAN region to establish a derivatives market in addition to Singapore, Malaysia, Thailand and Indonesia, and the 42nd country in the world to have this type of high-end financial market.
According to the Viet Dragon Securities Corporation, the Vietnamese stock market has been more sensitive to global market developments and international events. Compared to countries on the emerging market watchlist, Vietnam’s macroeconomic indicators are quite good. Since the beginning of 2018, the Vietnamese dong has only been devalued by 2.7 percent against the US dollar despite continued FED interest rate hikes.
Jeffrey Goh, managing director of Maybank Kim Eng, said Vietnam’s international economic integration and market opening will provide opportunities for Vietnam to attract foreign direct and indirect investment.
Increasing the ownership rate of foreign investors at companies listed on the stock exchange and completing the
amended draft Law on Securities will help investors assess the market’s capacity.