Securities market attracts foreign investors

09:46 | 19/06/2017 Finance - Banking

(VEN) - The Vietnamese securities market last month reached a peak of more than VND2.26 trillion in terms of capitalization, up 16 percent from late 2016. Its record capitalization is equivalent to 50.3 percent of the country’s gross domestic product (GDP).

securities market attracts foreign investors
Foreign investors bought shares worth more than VND607 billion in the last week of May 2017 alone

The growth breakthrough is attributed to foreign investors’ increasing share purchases.

Foreign investors bought shares worth more than VND607 billion in the last week of May 2017 alone, taking the total in the first five months of this year to almost VND6.53 trillion.

The VNM (Vietnam Dairy Products Joint Stock Company) topped shares on the Ho Chi Minh Stock Exchange (HO SE) in the first quarter of 2017 in terms of share value bought by foreign investors - more than VND2.65 trillion. This was followed by NVL of the Novaland Real Estate (VND353.6 billion), SAB of the Saigon Beer-Alcohol-Beverage Corporation (VND340.9 billion) and VJC of the Viet Jet Aviation Joint Stock Company (VND205 billion). NVL and SAB were officially traded on the HO SE in December 2016, while VJC was listed on the exchange only one month plus ago.

Improving securities market

According to economists, the policy on selling state holdings in state-owned enterprises, major business IPO (initial public offering) plans and the higher rate of foreign holdings are expected to make the Vietnamese securities market more attractive to foreign investors.

But for now, only a few leading shares such as VNM, SAB and VJC have attracted foreign buyers. It is important for Vietnam to strengthen state-owned enterprise privatization to improve businesses’ operational efficiency and diversify goods on, and increase value of, the securities market.

Leading Vietnamese businesses, including Mobifone, Petrolimex and others will have their shares listed on the securities

market soon.

Ngoc Thao