Foreign investors flock to Vietnam stocks
Since the top of 2013 through June 5, foreign investors have been net buyers of $244 million in Vietnamese stocks, the largest year-to-date purchases since 2008.
Vietnam’s Ho Chi Minh Stock Index (VNINDEX) has been the best performing markets in Southeast Asia so far in 2013. The index has gained 27 per cent year-to-date and has rallied 48 per cent since the beginning of 2012, expanding quite impressively as increased efforts from the government to curb inflation, lower interest rates, and increased foreign-exchange reserves have been successful.
Vietnamese regulators are looking to ramp up foreign investment flow into the country even further and plan to submit a proposal next month to ease current restrictions on foreign ownership in companies. The Ministry of Finance will submit this proposal to the government requesting an increase in the limit in foreign ownership of publicly traded companies from the current 49 per cent cap.
“If there is a breakthrough in foreign investment, it will positively impact the development of the stock market,” said Vu Bang, Chairman of the State Securities Commission, in an interview with Bloomberg on June 5.
To do a regional comparison, stocks on Vietnam’s two main bourses are valued at $45.6 billion, which is 13 times smaller than that of Singapore, the region’s largest market whose stocks are valued at $595.8 billion. Approximately $51 million in securities are traded on an average day this year on the Ho Chi Minh City Stock Exchange, compared to approximately $1.34 billion traded on an average day for Singapore.
On June 11, Vietnam’s two main bourses announced an additional measure to boost liquidity and attract more investment by extending their trading hours. The main bourse, the Ho Chi Minh City Stock Exchange, will extend the afternoon trade session by 45 minutes starting around the third quarter of this year. The Hanoi Stock Exchange will also extend the afternoon session by 45 minutes with a target date of July 8.
“Longer trading hours will allow institutional and professional traders to spread out trading more,” said Attila Vajda, an analyst for ACB Securities in Ho Chi Minh City.
The two exchanges are planning to add more market products such as covered warrants and will offer a plan for derivatives by the end of the year, Chairman Bang says.
Earlier this year, the State Securities Commission raised the ratio limit for margin-financing on the country’s two exchanges and also expanded trading bands.
The State Securities Commission plans to submit a proposal this year to merge the country’s two main exchanges in Ho Chi Minh City and Hanoi by the end of this year.
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Since the top of 2013 through June 5, foreign investors have been net buyers of $244 million in Vietnamese stocks, the largest year-to-date purchases since 2008. Vietnam’s Ho Chi Minh Stock Index (VNINDEX) has been the best performing markets in Southeast Asia so far in 2013. The index has gained 27 per cent year-to-date and has rallied 48 per cent since the beginning of 2012, expanding quite impressively as increased efforts from the government to curb inflation, lower interest rates, and increased foreign-exchange reserves have been successful. Vietnamese regulators are looking to ramp up foreign investment flow into the country...
Since the top of 2013 through June 5, foreign investors have been net buyers of $244 million in Vietnamese stocks, the largest year-to-date purchases since 2008.
Vietnam’s Ho Chi Minh Stock Index (VNINDEX) has been the best performing markets in Southeast Asia so far in 2013. The index has gained 27 per cent year-to-date and has rallied 48 per cent since the beginning of 2012, expanding quite impressively as increased efforts from the government to curb inflation, lower interest rates, and increased foreign-exchange reserves have been successful.
Vietnamese regulators are looking to ramp up foreign investment flow into the country even further and plan to submit a proposal next month to ease current restrictions on foreign ownership in companies. The Ministry of Finance will submit this proposal to the government requesting an increase in the limit in foreign ownership of publicly traded companies from the current 49 per cent cap.
“If there is a breakthrough in foreign investment, it will positively impact the development of the stock market,” said Vu Bang, Chairman of the State Securities Commission, in an interview with Bloomberg on June 5.
To do a regional comparison, stocks on Vietnam’s two main bourses are valued at $45.6 billion, which is 13 times smaller than that of Singapore, the region’s largest market whose stocks are valued at $595.8 billion. Approximately $51 million in securities are traded on an average day this year on the Ho Chi Minh City Stock Exchange, compared to approximately $1.34 billion traded on an average day for Singapore.
On June 11, Vietnam’s two main bourses announced an additional measure to boost liquidity and attract more investment by extending their trading hours. The main bourse, the Ho Chi Minh City Stock Exchange, will extend the afternoon trade session by 45 minutes starting around the third quarter of this year. The Hanoi Stock Exchange will also extend the afternoon session by 45 minutes with a target date of July 8.
“Longer trading hours will allow institutional and professional traders to spread out trading more,” said Attila Vajda, an analyst for ACB Securities in Ho Chi Minh City.
The two exchanges are planning to add more market products such as covered warrants and will offer a plan for derivatives by the end of the year, Chairman Bang says.
Earlier this year, the State Securities Commission raised the ratio limit for margin-financing on the country’s two exchanges and also expanded trading bands.
The State Securities Commission plans to submit a proposal this year to merge the country’s two main exchanges in Ho Chi Minh City and Hanoi by the end of this year.
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Other posts by this author:
https://investvine.com/high-hopes-for-uae-qatar-upgrade
