Stock market in 2017 saw a rapid growth

	2017—A year of “firsts” for Vietnamese stock market
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	HNX amended the regulation on securities listing

The conference of SSC held on 22nd January 2018

Indicators achieved sharp growth

According to Mrs. Vu Thi Tran Phuong, Vice Chairman of the SSC, in 2017, the Vietnamese stock market has seen the highest growth rate in Asia and was considered as a bright spot to attract indirect capital flow compared to other countries in the region.

The scale of liquidity in the stock market last year has developed rapidly. Accordingly, the market capitalization reached VND3.5 trillion (a year-on-year increase of 80.5%), equivalent to 70.2% of GDP in 2017, exceeding the target set by the Government by 2020. The liquidity increased by 66% from VND3 trillion / session in 2016 to VND5 trillion / session in 2017. The VN Index increased by 46% and 48% respectively, reaching the highest level in recent 10 years.

In the early days of 2018, capitalization continued to increase by 10%, reaching nearly VND3.8 trillion, equal to 77.3% of GDP. Average liquidity reached VND9.6 trillion/session, up 90% over the average of 2017 and 46% higher than the average in the fourth quarter of 2017.

Particularly, foreign capital inflows reached the highest level in past 10 years, with the total net purchase value of foreign investors (FDI) on the stock market of VND 46.7 trillion, achieving the highest rate ever ( up 90% over the end of 2016.)

By the end of 2017, FDI were net buyers on all stock exchanges with a value of VND28,000 billion of shares, fund certificates and VND18.7 trillion of bonds.

In addition, according to the latest statistics, FDIs continued to be net buyers in all trading sessions of January 2018 with the total net purchase value of VND 7.2 trillion.

Last year, the total mobilized capital on the stock market reached nearly VNĐ 245 trillion, of which the government bond in auction reached over VND 194.3 trillion, the issued shares and corporate bonds earned nearly VND 47.9 trillion and equitization auctions through the 2 exchanges gained more than VNĐ2.7 trillion.

Regarding equitization and divestment in 2017, the two exchanges held 74 auctions for equitization and divestment with the total value of VND 125.4 trillion, the success rate reached 52.4 %. Thus, the total value obtained was 5.4 times higher than in 2016.

According to Phuong, business results of listed companies (DNNY) in the first nine months of 2017 improved significantly, the total profit in 9 months rose by 23% over the same period last year, reaching the highest level in the past 7 years; the revenue increased by 18%, the profit rose by 23%. The total loss also dropped sharply over the same period last year (down 69%).

Reporting on the Government bond market, Mrs. Phuong said that in 2017, the Government bond market has improved significantly over previous years. As of 29th December 2017, mobilized capital was over VND 194.3 trillion, of which the State Treasury mobilized over VND 160 trillion, reaching 94.5% of the year plan.

By the end of 2017, listed G-bond loans was VND 997.5 trillion, up 7.2% compared to the end of 2016 (equivalent to 20% of GDP). Although the market scale only increased slightly, but the market liquidity increased rapidly. Average trading value reached nearly VND 9 trillion / session, a year-on-year increase of 42%, of which repo trading increased by 84% and accounted for 49% of total trading value of the government bond market.

According to Phuong, after nearly five months of operation, the derivatives market has grown in contract volume, trading value and number of accounts. Total contract trading volume reached 1,106,353 contracts, corresponding to the total contract trading value of VND 96,298 billion. On average, the trading volume reached 10,954 contracts per day and the contract trading value reached VND 953.44 billion per session. Number of monthly sessions rose by 49% in contract volume and 58% in trading value.

The number of investor’s accounts continued to increase. By the end of 2017, more than 17,000 trading accounts were opened, nearly three times higher than the end of August 2017.

Strengthening the inspection, supervision and handling of violations

Besides the positive results, the stock market still has some problems to be removed in order to attract foreign capital inflows into Vietnam. For example, the inspection, supervision and handling of violations were difficult, while violations were complicated and sophisticated. In recent years, the SSC has issued about 349 decisions on administrative sanctions in the field of securities and stock market. The number of violations has increased 2.4 times over the same period in 2016. At the same time, the SSC has for the first time refused to approve audited 2016 financial statements of 15 public enterprises and suspended approved auditor capacity.

However, the inspection and clarification of the violations on manipulation were still restricted and difficult because the SSC was not authorized to request agencies and individuals to provide information (on the cash flow, information related to suspicious subjects) and to call concerned individuals.

Addressing the conference, Deputy Minister of Finance Tran Xuan Ha stressed: Last year, the stock market mobilized capital very well, contributing to the restructuring of public debt, ensuring financial budgets. Revenue from equitization and divestment of companies was higher than it in previous years. Thereby, facilitating economic growth, ensuring the macro balance factors, including fiscal and monetary policies to develop the country.

However, the Deputy Minister said that there were still some shortcomings to be removed. Recently, the SSC has strengthened inspection, examination and strictly handled the right people and right violations. Decree on financial regime applicable to credit institutions was issued a long time ago, but so far only one company registered its operation under the decree.

In addition, Deputy Minister also stressed, despite the Government’s decree and the Ministry of Finance’s circular on the development of voluntary retirement fund, but until now no fund has been issued yet. Fund management companies do not have funds, only portfolio management. Many securities companies even withdrew operating licenses but still operate.

In the coming time, the Deputy Minister requested to develop a revised Law on Securities to replace the current Law on Securities (submitted to the National Assembly November, 2018). It is required to coordinate with the ministries and sectors to perform the task of SOEs equitization, the mechanism of capital divestment at enterprises and how to make the stock market really become the market that promotes the structure of the economy, followed by mechanism of operation and risk management.

Positive equitisation and divestment outlook in 2018 Regarded as a fruitful year for the Vietnamese stock market, 2017 also saw great strides in the ...

"In addition to creating opportunities for market development, inspection and management should be strengthened to ensure that market participants comply with the law, ensuring transparency and building trust for domestic and foreign investors"- Deputy Minister Tran Xuan Ha said.