INTERNATIONAL INVESTMENT
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1. An improvement to the Ho Chi Minh City Stock Exchange (HSX) technical infrastructure alleviates chronic congestions and opens the door to stronger liquidity.
Vietnam's stock market has grown tremendously in terms of liquidity, size, and the number of participants despite the lingering outbreak, which was also the cause for the HSX’s constant congestion.
On July 5, the HSX officially launched the troubleshooting solution for its transaction system, which was developed in collaboration with FPT on the Hanoi Stock Exchange (HNX) system software platform, after 100 days.
Despite the market's continual peaks, the new solution has functioned consistently and smoothly, addressinginvestors’ urgent needs with an order volume of up to 3 -5 million orders per day.
This trading technique has resulted in an increase in market liquidity, and new records have been established.
2. The stock market's capitalisation exceeds 120 per cent of Vietnam’s GDP.
The stock market has grown dramatically, reaching 122.2 per cent of national GDP on November 12, 2021.
According to the Scheme on Restructuring the Stock Market and Insurance Market 2020-2025, the government sets a target of 120 per cent of GDP capitalisation by 2025. Thus, the project's goal is to be finished in less than four years.
3. A set of steps designed to mitigate the corporate bond market’s risks
The corporate bond market is continuing its growth momentum in 2021.
However, the corporate bond market’s steam in 2021 is attributable to risk alerts and quality improvement emanating from state management agencies, not issuance volume.
Furthermore, in terms of legal regime, the SBV has released Circular 16, and the MoF is formulating a proposal to replace Decree 153 in an attempt to optimise market efficiency.
4. The number of newly registered securities accounts sets a new high.
The number of securities investment accounts will reach an all-time high in 2021. Statistics indicate that the total number of securities accounts will be 4.08 million by the end of November 2021, up from 2.77 million at the end of 2020. Thus, over 1.31 million new accounts were established in the first 11 months of 2021, with domestic private investors opening 1,306 million accounts.
In addition, the number of domestic individual investor accounts in 11 months is 3.3 times more than the total number in 2020. The year 2021 is expected to be a record year for enticing investors to engage in the market.
5. The scale of capital increases by publicly traded corporations is at an all-time high.
According to the State Securities Commisison (SSC), 147 listed businesses are expected to expand their equity by 3.8 per cent, equivalent to VND102.6 trillion($4.46 billion), through share offering in 2021. If the issuance plan is effectively implemented, 2021 will be a record year for the amount of capital mobilised through the issuing of listed company shares.
In comparison to 2019, 2020, this figure is 1.4 and more than five times greater. When combined with the substantial impact of the pandemic, capital mobilisation in 2020 dropped compared to 2019, but had a robust return in 2021.
6. Executing the bail-out package for cash-strapped Vietnam Airlines.
Earlier July, Vietnam Airlines inked a credit contract with three commercial banks, including SeABank, MSB, and SHB for a total of VND4 trillion ($173.9 million). In addition, on September 13, the State Capital Investment Corporation released about VND7 trillion ($304.35 million) to acquire shares in Vietnam Airlines using the privilege of state shareholders to buy shares.
Furthermore, the recent capital injection of Vietnam Airlines also marks a significant milestone of a state assistance package. This aims to help Vietnam Airlines to ride out the bumps.
7. Foreign investors sell at an all-time high.
The stock market deflated as cash inflows continued to surge as a result of the high involvement of domestic cash flow. Foreign capital flows, notwithstanding, will be a less fortunate narrative in 2021. 2021 could be the year when foreign investors have a record net selling. Foreign investors had net sold about $2.5 billion by mid-December 2021, according to figures from SSC.
When the pandemic strikes, net selling by foreign investors is a regular tendency in many international stock markets. Furthermore, as net selling by foreign investors was absorbed by local investors and did not damage investor sentiments as much as in prior years, Vietnam's stock market managed to maintain a very astounding upward trajectory.
Additionally, the net withdrawal of overseas funds is insignificant and substantially lower than in many other emerging and frontier economies. Despite the fact that foreign investors were net sellers, foreign financial flows persisted in Vietnam and sought opportunities.
8. The VN-Index reached a new record high.
In 2021, the COVID-19 pandemic has exerted a detrimental impact on Vietnam, leading GDP to fall by 6.17 per cent in the third quarter. The stock market, on the other hand, had exponential rise, culminating in exceeding the historic top of 1,200 points in April 2021. With two peaks in 2007 and 2018, this is the record peak set throughout the Vietnamese stock market's 20-year history. After the VN-Index surpassed its record high, the market continued to fall and eventually achieved a new high of roughly 1,500 points.
Despite the market reaching new record highs on a regular basis, valuation levels continued to fall as a result of the remarkable rise in business results of listed businesses. The VN-Index is currently at around 1,500 points, with a Price-to-Earning ratio (P/E) of slightly over 17 times.
9. 25th annniversary of the Securities Industry and the launch of the Vietnam Stock Exchange (VNX)
Vietnam's stock sector formally commemorated 25 years of establishment and development on November 28, 2021. Vietnam's stock market has surmounted numerous obstacles and challenges to accomplish significant milestones, proving its importance to the domestic economy.
Vietnam has established a stock market institution that is progressing in the right direction and in line with the economy's current level of development, establishing a critical medium- and long-term equity stream for the economy; gradually approaching international standards and initiating the process of international and regional integration.
The securities sector has created the framework for elevating Vietnam's stock market to a new level of strength, integrity, and sustainability.
On the other hand, in mid-December, the Vietnam Stock Exchange (VNX) went live, advancing the cause for the domestic stock market.
A parent-subsidiary model has been decided upon in accordance with the reorganisation of the HNX and the HSX. The newly-launched VNX is headquartered in Hanoi. It is a limited liability business with the state owning 100 per cent of the stakes.
Additionally, VNX is the holding company for HNX and HSX, holding100 per cent of the capital.
HNX will be accountable for managing and running the derivatives, bond, while HSX is in charge of organising and running the stock exchange and other securities in accordance with applicable legislation.
10. The market's juridical imprint
The amended Law on Securities, Law on Enterprise, Law on Investment, and other decrees took effect in early 2021, establishing a specific statutory buffer zone for the business community and stock market to operate.
