Illustrative image (Photo: VNA) Hanoi (VNS/VNA) - Strong individual purchasing power has been thekey to the strong rebound of the Vietnamese stock market this year after it washit twice by the COVID-19 outbreaks.
Vietnam’s benchmark VN-Index had its first collapse in late March when it losttotal 26 percent in the last three weeks of the month, leading up to a totalslump of 33.4 percent in the first quarter.
The second market collapse came in late July when the VN-Index was dragged downby total 8.35 percent in two days.
Both collapses came after investors panicked after new coronavirus infectioncases were reported in Hanoi and Da Nang.
In both collapses, strong purchasing power from individual investors has beenthe key to the strong market rebounds.
In January-September, more than 252,000 new trading accounts were opened atsecurities firms, up 34 percent on-year, Ta Thanh Binh, State SecuritiesCommission’s Director of the Securities Market Development Department, told aconference on October 21.
In September alone, more than 31,400 new accounts were opened, she said, addingthe growth of new accounts has made the local market more active.
Daily average trading volume on the Ho Chi Minh and Hanoi markets in the secondand third quarters of the year grew by 40 percent year on year, the commissionofficial said.
The Vietnamese stock market has performed better than expectations, consideredamong the fastest-growing markets amid the COVID-19 pandemic, Binh added.
“We have almost reclaimed the loss during the year. The market capitalisationnow accounts for 71.3 percent of the country’s total GDP,” she said.
The benchmark VN-Index ended Wednesday at 939.03 points, a 5.29 percent gapbelow its peak of 991.46 points made on January 22 before the collapses.
“Most individual investors want to stick around, especially when other optionsoffer low interest rates,” Le Duc Khanh, director of the investment departmentat VPS Securities JSC, told the conference.
“Though their accounts are new, they probably had experience and practice withthe market,” he said.
As each investor would have his own method of investment, the potential boostprovided for the market would vary from one to another.
“If you are value investors, just buy and hold onto the targeted stocks, take avacation and come back when your investments are profitable without payingattention to the development of the whole market,” Khanh said.
There are now 2.6 million trading accounts in Vietnam and each investor mayhave many accounts at different securities firms, Bui Hoang Hai, thecommission’s director of the Securities Issuance Department, said.
“The number of trading accounts is expected to account for 3 percent of Vietnam’stotal population in 2020 and 5 percent in 2025,” he said.
“Compared to other markets such as the US and China, the expected figures arestill humble,” Hai said.
“We need professional investors, who are strong enough to take the risk. Theamended Law on Securities should correct the definition of professionalinvestors and some fields should be explored by professional investors only.”
There should be a restructure for the market to classify the professional fromthe non-professional so newbies can get access to less risky sections of thesecurities market, he added.
“I think the market has not become too risky but investors should be reallycareful and make the right choice,” Khanh said.
Low interest rates offered by banks encourage people to look for alternative investmentoptions, including securities market, he said.
“Vietnam’s stock market has room to grow further. The market’s average price-toearnings per share (P/E) now is 16,” Khanh said.
“Obviously, there are plenty of opportunities at the moment and investorsshould look at companies with strong financial records to limit the risks andlosses.”
Strong individual purchasing power may drive the VN-Index back to 980-1,000points at the end of the year, he forecast./.
Vietnam’s benchmark VN-Index had its first collapse in late March when it losttotal 26 percent in the last three weeks of the month, leading up to a totalslump of 33.4 percent in the first quarter.
The second market collapse came in late July when the VN-Index was dragged downby total 8.35 percent in two days.
Both collapses came after investors panicked after new coronavirus infectioncases were reported in Hanoi and Da Nang.
In both collapses, strong purchasing power from individual investors has beenthe key to the strong market rebounds.
In January-September, more than 252,000 new trading accounts were opened atsecurities firms, up 34 percent on-year, Ta Thanh Binh, State SecuritiesCommission’s Director of the Securities Market Development Department, told aconference on October 21.
In September alone, more than 31,400 new accounts were opened, she said, addingthe growth of new accounts has made the local market more active.
Daily average trading volume on the Ho Chi Minh and Hanoi markets in the secondand third quarters of the year grew by 40 percent year on year, the commissionofficial said.
The Vietnamese stock market has performed better than expectations, consideredamong the fastest-growing markets amid the COVID-19 pandemic, Binh added.
“We have almost reclaimed the loss during the year. The market capitalisationnow accounts for 71.3 percent of the country’s total GDP,” she said.
The benchmark VN-Index ended Wednesday at 939.03 points, a 5.29 percent gapbelow its peak of 991.46 points made on January 22 before the collapses.
“Most individual investors want to stick around, especially when other optionsoffer low interest rates,” Le Duc Khanh, director of the investment departmentat VPS Securities JSC, told the conference.
“Though their accounts are new, they probably had experience and practice withthe market,” he said.
As each investor would have his own method of investment, the potential boostprovided for the market would vary from one to another.
“If you are value investors, just buy and hold onto the targeted stocks, take avacation and come back when your investments are profitable without payingattention to the development of the whole market,” Khanh said.
There are now 2.6 million trading accounts in Vietnam and each investor mayhave many accounts at different securities firms, Bui Hoang Hai, thecommission’s director of the Securities Issuance Department, said.
“The number of trading accounts is expected to account for 3 percent of Vietnam’stotal population in 2020 and 5 percent in 2025,” he said.
“Compared to other markets such as the US and China, the expected figures arestill humble,” Hai said.
“We need professional investors, who are strong enough to take the risk. Theamended Law on Securities should correct the definition of professionalinvestors and some fields should be explored by professional investors only.”
There should be a restructure for the market to classify the professional fromthe non-professional so newbies can get access to less risky sections of thesecurities market, he added.
“I think the market has not become too risky but investors should be reallycareful and make the right choice,” Khanh said.
Low interest rates offered by banks encourage people to look for alternative investmentoptions, including securities market, he said.
“Vietnam’s stock market has room to grow further. The market’s average price-toearnings per share (P/E) now is 16,” Khanh said.
“Obviously, there are plenty of opportunities at the moment and investorsshould look at companies with strong financial records to limit the risks andlosses.”
Strong individual purchasing power may drive the VN-Index back to 980-1,000points at the end of the year, he forecast./.
VNA
