In the middle of this year, the epidemic in Vietnam was severe and the stock market crashed. However, with the gradual opening of the economy and the continuous growth of retail investors, the Vietnamese stock market has performed well recently.
As of December 9 this year, the Vietnamese Ho Chi Minh Index (VNI) index rose 33%, leading other Asian countries in performance.
Data source: investment
Retail investors hit a new high
According to statistics from the Vietnam Securities Depository, in November this year, the number of new accounts opened by Vietnam stocks exceeded 220,000, an increase of 70% over October, and set a new record for previous monthly highs. Among them, the number of new accounts opened by individual investors was the largest, at 220,602; the number of new accounts opened by overseas individual investors was 473, the highest since May.
According to Vietnam News Agency , as of November 30, Vietnam's securities trading accounts were 4083,325, an increase of more than 1.3 million from the end of 2020.
analysis pointed out that against the background of low interest rates in banks, idle funds from Vietnamese residents have turned to securities investment channels. Since March, the number of new personal accounts has remained above 100,000 per month. Net buying by individual Vietnamese investors has become the main driving force behind the market rebound. In the first 11 months, Vietnamese individual investors net purchases of more than 84 trillion VND .
Foreign capital makes profits
The main players in the Vietnamese securities market are retail investors and foreign capital.
This year, as major economies led by the United States introduced large-scale monetary and fiscal stimulus policies, resulting in a global liquidity flooding, and Vietnam's stock market rose nearly 70% in the first half of the year. But as the epidemic in Vietnam intensified, the large-scale withdrawal of foreign capital caused a sharp decline in Vietnam's stock market.
According to data compiled by Bloomberg , foreign capital sold a total of US$2.7 billion worth of stocks in 2021, setting a record high. Stephen McKeever, head of the institutional client department of Ho Chi Minh City Securities Company, said that many foreign capital sell-offs are just profit-taking. The market has performed strongly and some investors have cashed out.
According to Bloomberg, some foreign institutions believe that the long-term fundamentals of the Vietnam stock market are positive and foreign investors will return to Vietnam. They said Vietnam's demographic structure, position in the Asian production chain and attractive valuations provide stocks with upside.
VNDirect, a local broker in Vietnam, estimates that in 2022, Vietnam is still optimistic about the long-term development of the Vietnam market, with the expansion of bank commercial value, infrastructure construction, bulk raw material prices and domestic consumption stimulated by large-scale funds.
VinaCapita believes that Vietnam is following the "East Asian Development Model" that many Asian countries have experienced, that is, , the government-led export-oriented economic development after , and its economy has grown significantly, driving the stock market to soar.
Currently, the number of companies with a market value of more than US$1 billion in Vietnam has increased from 10 in 2015 to nearly 50, and the total market value of the stock market has also soared from 30% of the country's GDP to 90%.
According to local investment institutions, Vietnam's GDP growth rate will soar from 2.5% in 2021 to more than 7% in 2022, mainly due to the partial recovery of foreign tourism, the surge in infrastructure spending and the government's proposed new fiscal stimulus package, of which the new fiscal stimulus package accounts for 10% of GDP. It is reported that the Vietnamese government's stimulus plan and investment plan will be finalized in the near future.
reporter Li Xizi
editor Cheng Hui
editor Sun Xiao
cover photography Wang Zhexi
