Recently, Li Ka-shing's real estate flagship Cheung Shi Group and Japan's Orix Group, through the local partner Wan Shengfa Group of Vietnam, met with Pan Wenmai, mayor of Ho Chi Minh City, Vietnam, to discuss investment in Ho Chi Minh City .
In addition, Vietnam's export performance in the first quarter of this year hit a record high. Data released by the General Administration of Customs of Vietnam showed that in the first quarter of this year, Vietnam's cargo exports were US$89.1 billion (584.2 billion yuan); and In the first quarter of 2022, Shenzhen exported RMB407.66 billion, surpassing Shenzhen for the first time in a single quarter.
Vietnam's fever has not subsided, and many people have turned their attention to this narrow land of Southeast Asia. But what is more attractive is the Vietnamese stock market, whose index has increased by more than 120% in two years. Previously, we have an article to introduce some basic situations of the Vietnamese stock market in detail. Today, let’s take a look at some basic trading rules of the Vietnamese stock market and discuss the Vietnamese economy and stock market situation together. We hope that investors will have a more comprehensive understanding of the Vietnamese economy and stock market.
stock market performed well
Recently, although the Vietnamese stock market followed the global stock market to plummet, the cumulative increase of Vietnam's Ho Chi Minh Index and Vietnam VN30 Index in two years is still 120%.
Vietnam Ho Chi Minh Index weekly chart, from Investing.com
Vietnam VN30 Index weekly chart, from Investing.com
There are now three exchanges in Vietnam, namely Ho Chi Minh Stock Exchange ( Main Board Market ), Hanoi Stock Exchange (small and medium board) and UPcom Exchange (similar to GEM ). There are 768 stocks and funds listed on two stock exchanges, and 883 stocks in the UPcom market.
Public information shows that as of the first quarter, the scale of Vietnam's stock market has now exceeded Singapore , ranking second among ASEAN countries, second only to Thailand. The average daily turnover is 30.8 trillion VND (about 8.8 billion RMB), and the number of newly opened accounts continues to increase. In the first quarter of 2022, there were 676,616 new accounts, almost the same as the number of new accounts opened throughout 2021.
stock also has a considerable increase. We have screened the component stock in the Ho Chi Minh Index in Vietnam. The top three companies in this year's increase are: Foreign Trade Development and Investment Corp of Ho Chi Minh City (FDC) (real estate management and development industry), Cuulong Fish JSC (ACL) (food industry), International Development & Investment Corp (IDI) (food industry).
The top ten companies with the growth rate this year are mainly distributed in real estate, food, transportation, processing and manufacturing industries. From the company's industry, we can also see that Vietnam's current domestic economic demand is growing continuously, and there may be greater room for growth in the future.
Vietnam Ho Chi Minh Index constituent stocks ranked year-to-date, from Investing.com
Stock Market Trading Rules
We just listed some common trading rules for reference only.
trading time
trading unit
share price increase and decrease
rise and decline and transaction settlement
trade fee and tax: Compared with the domestic handling fee of about 2.5 per ten thousand, the Vietnam stock trading rate is very high. Through software transactions, the transaction rate commission is 0.15%, 0.15% is charged when buying, 0.15% is charged when selling, and 0.1% tax is also required to be automatically paid. In addition, there is custody fee and securities transfer in and outage fee.
Why is the Vietnam stock market so bullish?
is mainly due to the steady economic growth. In terms of growth rate alone, the growth rate of GDP in Vietnam has maintained medium-to-high growth. On March 29, Vietnam released its first quarter GDP data. In the first quarter, Vietnam's GDP reached US$92.1 billion, equivalent to RMB 583.9 billion, with a growth rate of 5.03%.
Vietnam's quarterly GDP growth rate, from Investing.com
Let's look at the contribution rate of foreign investment in GDP growth, which can be directly reflected in import and export data. Public information shows that Vietnam's import and export of goods remained relatively vibrant in the first quarter - the growth rate of export commodities reached 22%, and the growth rate of imported commodities reached 26.3%. In the first quarter, the total foreign trade volume rose to US$152.65 billion, a year-on-year increase of 24.1%.
However, the proportion of foreign capital in the stock market is still relatively low. The latest report of Hanoi Stock Exchange (HNX) in 2022 shows that the trading volume of overseas investors only accounts for 1.52%. It can be seen that the proportion of foreign capital in the Vietnam stock market is not very high.
Many investors believe that Vietnam is a new "world factory" and that many world-class brands will move OEM factories to Vietnam. For example, half of the products of Adi and Nike are handed over to Vietnam for OEM, not only basic manufacturing, but also mid-to-high-end manufacturing industries are also pouring into Vietnam. For example, electronic products OEM, Samsung and Apple both plan to increase investment in factory construction in Vietnam. Looking ahead, there are also investment banks optimistic about the future. In the Vietnamese Macroeconomic report titled "Vietnam - Recovery in the second quarter will be stronger", maintaining Vietnam's economic growth forecast for 2022 at 6.7%. Vietnam's economic growth may be stronger from the end of the second quarter of this year, the report said as domestic demand increases and tourism reopens.
Is there any insufficiency in the Vietnam stock market?
To study this issue, you can first study Vietnam's economic level, because most investors invest in Vietnam's stock market and are optimistic about Vietnam's future economic situation. Let’s first look at what level Vietnam is at among the ten ASEAN countries.
ASEAN countries' GDP and per capita GDP levels, from Wikipedia
ranks sixth in per capita GDP and third in total. According to Vietnam's own goal, Vietnam will develop into a developing country in , with industry developing towards modernization by 2030; by 2045, it will become a high-income developed country.
What is a high-income developed country? According to the definition of World Bank , this standard is $12,695 in 2021. Our per capita GDP last year was 81,000 yuan, which is almost the data of World Bank . Let’s compare South Korea. South Korea’s nominal GDP in 2021 reached 2057.45 trillion won, which is converted to US$179.78 billion at the average exchange rate, with a per capita GDP of US$34,700, and a per capita GDP of US$30,000.
The entire Vietnamese economic industry relies heavily on cheap labor and assembly factories. The future upgrade direction will also change from foreign-invested parts to foreign-invested factories to locally produced parts, but raw materials still need to be imported. With the increase in labor costs, low-end industries may also be transferred to other countries. As for incubating local brands, this one is extremely dependent on the local market, with a local population of more than 100 million. It is difficult to say whether it is big or not.
There is indeed a long way to go to achieve this goal set by Vietnam. A country's economic development is affected by many factors. I just talk about some of them here. Perhaps Vietnam can break through bottlenecks and create miracles in the future.
summary
If you want to seize the dividends of Vietnam's development band, investing in the stock market may be a good choice. However, Vietnam is currently an emerging country, and its financial market is often fragile. At present, mainstream countries around the world, especially , Fed , after the interest rate hike cycle, the funds flowing into emerging markets may be significantly reduced, and a large amount of funds will even withdraw from emerging markets. We have also noticed that the Vietnamese stock market has indeed rebounded recently.
Fast progress stems from the low starting point. Vietnam's development has just entered the first half. After a brief pullback, the Vietnamese stock market may continue to be strong with the development of Vietnam's economy. Entering the second half, when the market is saturated, Vietnam will face the same problem of all labor-intensive outward economies. When to choose to "get off", it will really test the level of investors.
