VN stock market grows rapidly in last 20 years
As of the end of 2019, the capitalization value of the securities market at HCM City Stock Exchange (HOSE) had reached 3.28 million of billion of VND, or 54.3 percent of GDP with 2.3 million investors’ accounts.
According to HOSE, by the end of 2000, or five months after the stock exchange became operational, there were less than 3,000 accounts with total trading value of VND90 billion.
By that time, foreign investors had not joined the Vietnamese stock market.
The market witnessed transactions by the first foreign investor on April 2, 2001, an investor with British nationality, who bought 100 TMS shares.
In early July 2003, VFM, the first fund management company, was established, becoming the first professional institutional investor in the market.
After five years of building the platform, by the end of 2004, the ‘basic goods’ of the market were available at HOSE, from shares and bonds to investment fund certificates.
|As of the end of 2019, the capitalization value of the securities market at the HCM City Stock Exchange (HOSE) had reached 3.28 million of billion of dong, or 54.3 percent of GDP with 2.3 million investors’ accounts.|
During that period, the total number of investors’ transaction accounts soared by 10 times. However, the figure was very modest, just equal to 0.3 percent of the Vietnamese population.
Only when businesses rushed to list their shares at HOSE and the then US President George W. Bush visited HOSE in late 2006 did the stock market become familiar to Vietnamese people.
Just within two years, 2006-2007, the number of investors’ accounts soared from 31,316 to 349,402, a record high growth rate of 230 percent per annum.
The number of securities companies and the intermediary finance organizations also soared from 13 in 2005 to 62 in 2007 and then to 91 in 2008.
Together with the increase in the number of accounts, the trading volume and trading value also increased sharply in 2016 by 217 percent and 223 percent, respectively, compared with one year before.
Foreign investors also showed bigger interest in the Vietnamese stock market with the number of their transaction accounts rising from 436 in 2005 to 2,100 in 2006 (382 percent), and to 8,441 in 2007 (302 percent).
The proportion of foreign investors’ trading value in the total trading value of the whole market increased from 11 percent in 2005 to 15 percent in 2006, 22.37 percent in 2008 and 24.7 percent.
Later, because of the global economic recession, the increase of number of foreign investors slowed down.
In 2011-2015, the number of investors’ accounts increased by 7.5 percent per annum, reaching 1.5 million by the end of 2015.
The figure increased sharply in 2015-2019 by 10 percent per annum, while the number of foreign investors increased by 15 percent after the government released Decree 60 and Circular 123, offering higher foreign ceiling ownership ratios in Vietnamese enterprises.
Translated by Kim Chi
Public investment is expected to be one of the major driving forces for economic development in the second half of the year. Securities investors have been advised to buy building-material manufacturing shares.
Commercial banks have six months to fulfill procedures to list their shares on the bourse, as requested by the Prime Minister.