* Oil price drop drag market down
The event that China illegally installed oil drilling rig in the Vietnam’s waters at the beginning of May this year had strongly affected the Vietnam’s stock market. Within seven trading sessions after that event, VN-Index plummeted more than 11 percent to 508.51 points. HNX-Index lost more than 13 percent to 68.74 points. These were biggest losing trading sessions since August 2012.
Along with that, the fact that oil price steeply dropped since September this year had affected the market via prospects revaluation of oil and gas shares. During 15 trading sessions in late-November and early-December, VN-Index slumped 27.8 percent and HNX-Index slid 6.7 percent. Of which, GAS declined 30.4 percent, PVD lost 27.8 percent, and PVS decreased 32.6 percent.
* VSD issues securities lending rules
In August, the Vietnam Securities Depository issued rules for securities lending and borrowing services at the center. It aims to support depository members with securities trading in case of transaction corrections in which a temporary shortage of securities for payment would occur or to support authorized participants to have enough securities to join in exchange-traded fund establishment and carry out exchange-traded transactions in accordance with current regulations.
Investors who deposit shares at VSD could lend this amount of securities but are not allowed to borrow securities. Borrowers are depository members or insitutions who were recognized as authorized participants.
* Securities trading institution restructure shows good results
Restructure procedure of securities trading institutions in 2014 continued to gain many achievements. From the beginning of 2014 to October, the State Securities Commission had dissolved, terminated operation or merged 8 securities companies; suspended and called halt 3 securities companies; and put 13 securities companies under supervision and special supervision, or reduced services. The number of brokers in Vietnam now has reduced to 81 out of 105 companies. Meanwhile, the number of fund management companies was now at 42.
* Vietnam’s stock market seeks for an upgrade to emerging market status
Since the beginning of 2014, the Ministry of Finance and State Securities Commission carried out investment promotion activities in large markets in Asia and Europe, and planned to carry out investment promotion activities in the US in the future. At the same time, they implemented steps for upgrading to emerging market status at MSCI Inc. Besides, Vietnam also joined the International Organization of Securities Commissions and signed memoranda with 25 European countries.
These are positive steps to fortify the position of Vietnam in global financial market. If the upgrade is successful, capital distribution limit for Vietnam’s market of international investment funds will be expanded, creating favorable conditions to encourgage foreign investors to invest in the country.
* Domestic exchange-traded fund launched
Vietnam’s stock market saw first domestic exchange-traded fund debut in 2014 with the establishment of the E1VFVN30 fund on July 4, whose certificate represents the performance of the 30 largest stocks on the southern bourse, tracked by the VN30 Index. The fund had officially traded on the Ho Chi Minh City Stock Exchange on October 6 with initial chartered capital of VND202 billion.
On October 14, SSIAM HNX30, the second domestic ETF in Vietnam and the first to simulate the domestic HNX30 index set, was also launched. The market has provided more options for long-term inflows from investors who prefer passive investment strategy. Foreign investors would also have chances to indirectly invest in stocks which have no more room for them via this fund.
* Accumulated trading volume of KLC and KLF hits record
The year of 2014 saw many shares with huge liquidity, comprising of KLF and FLC.
FLC made a record of accumulated trading volume in three consecutive trading sessions in mid-November with more than 113.6 million shares, accounting for up to 36 percent of the company’s total floating shares in the market.
KLF also reached an accumulated trading volume of 78.8 million shares by mid-November, accounting for 52 percent of the company’s total floating shares in the market.
Correlative matching value at the same time of FLC and KLF was more than VND1.44 trillion and VND1.06 trillion respectively.
* Government bond market posts good growth
In 2014, the government bond market showed good growth in both mobilization and secondary trading. From the beginning of this year to December 15, total trading volume via bond auctions at the Hanoi Stock Exchange reached VND214.34 trillion.
In secondary market, trading value of government bonds since January 1 this year nearly touched VND810.94 trillion, two times higher than that in 2013.
Average trading value also saw robust growth. By December 12, average trading value was at nearly VND3.47 trillion per trading session, doubled that in 2013.