With its rapid growth, the securities market is becoming an effective capital mobilization channel.
Over the past few months, the VN Index reached its highest point in 9 years and has increased 17% since the beginning of the year. According to the Ho Chi Minh City Stock Exchange, foreign investors have in the last 8 months invested VND14 trillion in HOSE stocks.
The growth has been attributed to Vietnam’s clear and extensive economic integration policies. The government has made an effort to promote the private sector and reform SOEs.
Nguyen Duc Hung Linh of the SSI Company said “Most SOEs own major market shares. The market capitalization will increase once these SOEs are listed.
Total market capitalization now accounts for half of GDP. If the 100 biggest enterprises are listed that will increase to 80% of GDP. This will attract more foreign investors.”
The Vietnamese government has implemented macro measures and fine-tuned market management and regulation policies to attract foreign investment.
Dr. Can Van Luc, a banking financial expert, says the securities market has soared since the National Assembly resolution on dealing with bad debts took effect in August.
“The resolution specifies requirements for settling bad debts which are very helpful for the banking system. This is the reason bank stocks are increasing. The securities market will grow even more as bad debts are settled,” said Mr Luc.
More than 11% of investors in Vietnam’s securities market are foreigners. Most of the 45 investment funds are foreign. Economists predict that Vietnam’s securities market will continue to grow and the VN-Index will surpass 800 points.