The ceremony marking the IPO of the real estate firm Vinhomes in May 2018 (Photo: VNA) Hanoi (VNA) - The Securities Journalists Club hasannounced the top 10 outstanding events for Vietnam’s stock market in 2018.
1. Stock market declines after five consecutive years ofgrowth
This year, the stock market witnessed the choppiest yearsince the 2008 global financial crisis. The market declined for the first timeafter five consecutive years of rallying in parallel with the growth momentumof the economy. It achieved a record high gain of 47 percent in 2017.
The benchmark VN-Index set an all-time peak of 1,211 points onApril 10, but then suffered a sharp decline of 27 percent, to reach the bottomof 888 points on October 30 despite the fact that Vietnam’s GDP has posted itsstrongest growth rate in a decade. The unexpected fall was attributed toobjective reasons such as accelerating trade tension between the US and Chinaand the interest rate hike trend of central banks worldwide.
2. Explosion of derivatives market
The derivatives market reached a remarkable growth in scale justover a year after the start of official operation on August 10, 2017. Themarket’s trading value soared to a record of nearly 17 trillion VND per sessionin October compared to 2.5 trillion VND (107 million USD) per session at theend of 2017. The number of derivative trading accounts has increased 2.2 timescompared to the end of 2017.
3. Million-dollar deals
This year witnessed many large-scale acquisitions. The StateCapital Investment Corporation (SCIC) and military-run telecoms group Vietteloffloaded their entire stakes, collectively at 79 percent, in the VietnamConstruction and Import-Export Joint Stock Corporation (Vinaconex), under theform of a public auction on November 22 on the Hanoi Stock Exchange, earning 9.36trillion VND from the deal.
Notable IPO deals include the 5.5 trillion VND deal of Binh SonRefinery and Petrochemical Company (BSR), the 4.1 trillion VND deal of the PetroVietnamOil Corporation (PV Oil), the 7 trillion VND deal of PetroVietnam PowerCorporation (PV Power) and the 922 million USD deal of Techcombank.
4. Vietnamese market added to FTSE’s watch list for upgrade
In its annual country classification review published lateSeptember, the UK-based data service provider said Vietnam “is currentlyclassified as a Frontier market and is being added to the watch list forpossible reclassification as Secondary Emerging market.”
5. HOSE shut down for 2 days
On the afternoon of January 22, the Ho Chi Minh StockExchange (HOSE) experienced a technical crash, bringing to a halt all tradingactivities during the rest of the day and also the next two days on January 23and 24. This raised the need to renew the market technology platform after 18years of operation.
6. Billion-dollar firms attract foreign capital
Four firms – Vietnam’s Housing Development Bank (HDB), VietnamTechnological and Commercial Joint Stock Bank (TCB), Tien Phong CommercialJoint Stock Bank (TPB) and Vinhomes Joint Stock Company (VHM), were added tothe list of the top 30 listed companies with market capitalisation of at least 1billion USD in 2018.
The capitalisation of the whole market has risen to itshighest level ever, reaching 3.98 quadrillion VND (170.93 billion USD),up 13.5 percent from 2017 and equivalent to 79.6 percentof GDP. The emergence of large-cap stocks has drawn the attention of foreigninvestors, with net buying value of 2.9 billion USD in 2018, approximatelyequal to 2017’s figure of 2.92 billion USD.
7. Establishment of a state capital management committee
In September, Vietnam’s Committee for State Capital Management(CMSC), known as the Super Committee, was officially launched, responsible tothe Government for effectiveness in the use of State capital and assets inSOEs. It is supervised by the Government, the National Assembly andlaw-protecting agencies.
The committee manages 19 State-owned economic groups andcorporations with the total value of State equity reaching more than 1quadrillion VND and total asset value of 2.3 quadrillion VND.
8. Stock price manipulation face penalties
Cases of stock price manipulation received administrativesanctions. Nine individuals were fined 550 million VND each, totalling 5.1billion VND, accounting for more than 25 percent of the total financial penaltiesin the market in 2018.
Regarding criminal cases, the Hanoi People’s Court in Octoberopened the first-ever trial in the case of 15 people who were charged withstock trading document falsification, stock price manipulation and fraudulentasset transfers. The defendants were reported to have falsified tradingdocuments of MTM shares on the Unlisted Public Company Market (UPCoM),manipulated MTM share prices and fraudulently transferred MTM stocks on themarket.
This is one of three criminal cases that were discovered andprosecuted.
9. The draft revised Law on Securities made public
The draft revised law on securities was based on theinheritance of the current Securities Law, broadening the scope of regulationsand adopting a new approach more suited to market conditions and overcoming theremaining limitations of the current law.
It is supposed to be submitted to the Government in thesecond quarter of 2019 and submitted to the National Assembly for considerationand approval in the fourth quarter of 2019.
10. Legal framework for the corporate bond market
In December this year, the Government issued Decree No163/2018/ND-CP regulating the issuance of corporate bonds, replacing Decree No90/2011/ND-CP dated December 14, 2011, to create a new legal framework forenterprises to raise capital through the issuance of bonds.
The new decree, coming into force from February 1 next year,aims at creating favourable conditions for enterprises to raise capital throughissuing bonds, developing the corporate bond market in the direction ofpublicity, transparency and protection of interests of private investors, stepby step expand the size of the corporate bond market, reducing the burden ofraising funds for bank credit.-VNA
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