Vietnam tops Southeast Asia in securities market growth

The domestic securities market was evaluated as one of the five world markets experiencing the highest growth and the greatest profitability in Southeast Asia in the 2nd quarter of 2016

SSC Chairman Vu Bang said at a recently held press conference on the securities market that, the Vietnamese securities market has not only sustained a relatively high growth since early this year but was also considered to top Southeast Asia in terms of growth. This is evidenced by the VN-Index that has reached its peak during the past 8 years (since March 2008); and liquidity that increased sharply, with the average value of each transaction session amounting to nearly VND6.2 trillion, up 25% from the previous year.

The market’s capitalized value has reached its peak during the last six years to obtain VND1,590 trillion. In the first 7 months of this year, almost VND254.5 trillion was mobilized through the securities market, an 81 percent increase over the same time in 2015. Through the securities market, shares totaling VND5.291 trillion in value have been auctioned successfully to transform 58 state enterprises into joint stock companies, up 75 percent from the same period last year.

According to SSC, as of August 23, VN-Index increased 13.8 percent compared to the end of 2015, while HNX-Index soared four percent. The market’s capitalized value came to VND1,590 trillion, equal to 38 percent of Vietnam’s gross domestic product (GDP), up 17% from late 2015.

The UpCom increased 10 times in scale compared to 2009, reaching 303 businesses.

The encouraging achievements were attributed to the legal framework for the securities market that was continually improved by the Government and related ministries and authorities. For example, SSC has submitted to the Ministry of Finance for issuance of 5 circulars on the derivative securities market, open funds, securities companies, the Covered Warrant product, providing guidelines for indirect investment abroad, and one decision approving Project “Transferring the government bond transaction payment function from commercial banks to the State Bank of Vietnam”. The relevant state authority issued Decree 60 (amending Decree 58) to pave the way for the securities market to attract more foreign capital.

SSC’s statistics show that, in the first half of this year, the Vietnamese securities market attracted US$722 million in foreign investment in, up 3.5 times from the same period last year, with foreign investors’ investment profile value reaching over US$16 billion, the highest level ever seen so far.

In the coming time, SSC will continue to improve the legal framework, mechanisms and policies for the development of the securities market, with focus on construction a plan for revising the Securities Law; continue to improve and submit to the Government for issuance of a decree amending Decree 108 and Decree on corporate governance; issuance of a circular guiding the implementation of the decree that amends Decree 108; Circular amending Circular 234 on trade in government bonds; circular on corporate bonds; Circular amending Circular 226 on financial security; complete rules and procedures for the derivative securities market; and the Covered Warrant product.

Duy Minh