Stock market changes over 20 years

uong Th ao

Vietnam’s stock market has affirmed its role as an ef fective capital mobilising channel for the economy.

From humble beginnings as a securities trading centre with just two listed companies when it opened on 20 July 2000, Vietnam's stock market now has more than 1,600 firms listed and traded on the two stock exchanges with a market capitalisation of over VND4 quadrillion (USD173 billion), equivalent to 65 percent of the country’s GDP. In particular, Ho Chi Minh City Stock Exchange is taking the lead, accounting for nearly 80 percent of the market capitalisation and is the listing hub for most major firms.

In just over 10 years, the government bond market has seen strong development and quickly confirmed its role as an effective capital mobilisation channel for the government. The Government has mobilised more capital, for longer terms and with reducing interest rates, contributing to the efficient restructuring of public debt.

The derivatives market which was established two years ago has huge potential for development, providing additional investment tools and effective risk management tools.

The maturity of Vietnam’s stock market is marked by the increasing interest of foreign investors, who are rising in number each year by 10 to 15 percent. As of the end of 2019, there were nearly 34,000 foreign investors accounting for nearly 21 percent of market capitalisation. According to analysts, this figure is still modest.

Another remarkable feature of Vietnam’s stock market is its contribution to the process of restructuring the economy, as a dynamic and efficient capital mobilisation and allocation channel.

The amended Securities Law passed by the National Assembly in November 2019 will be an important foundation for Vietnam’s stock market to operate

Ho Chi Minh City Stock Exchange turns 20

more efficiently and transparently.

The stock market targets capitalisation representing 120 percent of GDP with bonds representing 55 percent by 2025.

When the market became operational, only the VN Index showed the market performance. Later, new indexes were set up, including the HNX Index and UpCom Index. In addition, other indexes including VN30, VN100, HNX30, VNMID, VNSML, VNXALL, VNX50 and VNSI have also been launched to help investors better analyse the situation in order to make informed investment decisions.