Sustainable Development of Vietnam Securities Market
According to the assessment of the National Financial Supervision Commission (NFSC) of Vietnam, in the last week of 2017, foreign investors continued to maintain a net buying momentum, with a net purchase of 110 million U.S. dollars (including a net purchase of 80 million U.S. dollars in stocks and 30 million U.S. dollars in bonds) . In 2017, Vietnam’s foreign investment set a net purchase of US$2.1 billion (including a net purchase of US$900 million in bonds and US$1.2 billion in stocks), an increase of 6.8 times compared with 2016.
The National Financial Supervision Commission of Vietnam predicts that the prospect of indirect foreign investment funds flowing into the Vietnamese stock market in 2018 is relatively optimistic. The stocks of Vietnamese banking, retail, food, aviation and other industries will attract foreign capital inflows and will be the driving force behind the rise of the VN Index.
In addition, the state-owned capital divestment and initial public offering activities of high-quality Vietnamese companies such as FPT, Binh Ming Plastics, Qianfeng Plastics, Domesco, Pingshan Refining and Petrochemicals, Vinalines, PV Power and other high-quality Vietnamese companies conducted in early 2018 are helping to increase the fiscal revenue and foreign exchange of the Vietnamese government. The reserves also attracted an influx of foreign capital.
The market predicts that the Vietnamese securities market will continue to maintain a positive development momentum in 2018, which is mainly manifested in the following aspects: the size of the stock market breaks the record set at the end of 2017, as dozens of state-owned enterprises, including many large enterprises and groups, will carry out shareholding reforms. Promoting the structural adjustment and reform of state-owned enterprises will help provide a large number of high-quality commodities for the Vietnamese securities market and vigorously attract domestic and foreign investors, institutional investors and individual investors.
At the same time, the National Capital Management Commission was formally established and put into operation, commercial banks implemented structural restructuring, and state-owned capital divestment plans are expected to provide high-value commodities to the securities market. As a large number of regional and global large-scale private enterprises have sprung up like mushrooms, non-state-owned economic sectors have developed vigorously, thereby boosting market activity, driving the market value of the stock market to rise sharply and requiring the issuance of new shares.
In 2017, Vietnam's benchmark stock index VN-Index increased by 43% year-on-year, and some stocks rose several times in just one year, making the securities market a much-watched investment channel for investors. In view of the high and stable growth of prices, the abundant and safe capital flowing into the market, the strong guarantee of market liquidity, the average daily transaction volume of nearly 5 trillion VND, the enhancement of trust, the improvement of the ability to prevent market speculation and price manipulation, etc. The Vietnam Securities Index may exceed the 2017 peak and set a new record in 2018.
The number of investors in the Vietnamese stock market will increase significantly, while the quality, professionalism and psychological quality will also increase. Foreign investors continue to have full confidence in the development of the Vietnamese securities market. In 2017, foreign investors' net purchases amounted to more than 26 trillion VND, and the total value of the market value distribution table reached more than 32 billion US dollars, an increase of more than 81% year-on-year. At the end of 2017, the number of foreign investor accounts was 1.9 million, a year-on-year increase of 11%. Since the securities market is more attractive than other investment channels such as gold or foreign exchange, it is expected that the number of investors and the scale of investment will increase in 2018.
In addition, the securities market management system is becoming more modern and more in line with international practices and standards, which will help ensure the healthy, safe, transparent and effective operation of the Vietnamese stock market. The restructuring process of securities companies helps to improve the degree of specialization, competitiveness and reduce risks. The inevitable result is that the profits of many securities companies and investment funds rose to record levels in 2017 and are expected to continue to break records in 2018.