Entering 2021, the Vietnamese stock market has become a hot topic in Asia and even the world: from the beginning of the year to June, it has attracted many retail investors to "run and enter the market". By the collapse-like plunge in July, the feeling of "ice and fire" seems to

Source: Global Times

[ Global Times Special Correspondent in Vietnam Yunxu] Entering 2021, the Vietnamese stock market has become a hot topic in Asia and even the world: from the beginning of the year to June, it has attracted many retail investors to "run and enter the market". By the collapse-like plunge in July, the feeling of "ice and fire" seems to allow investors to experience the feeling of "taking a roller coaster" overnight. Many Chinese who trade stocks in Vietnam can't help but take a breath when they talk about their feelings during this period.

"In June, the child's face changes as soon as he says it!" Speaking of the recent situation in the Vietnamese stock market, Mr. Wang, a Chinese who has been deeply involved in the Vietnamese stock market for many years, blurted out this sentence. Mr. Wang told the Global Times reporter in Vietnam that he married Vietnamese girl Ms. Pei 10 years ago, and has since been engaged in import and export trade in Vietnam. Later, because he had some idle funds on hand, he persuaded his wife to invest in the stock market.

data shows that the Vietnam National Securities Commission was established in 1996, but for more than 20 years since then, the transaction volume has been very low. Until 2019, local Vietnamese residents were still very unfamiliar with the concept of "stock market". Many Vietnamese friends who have received higher education around Mr. Wang have no clear concept of the stock market, and they rarely hear that relatives and friends are trading stocks.

"The change has slowly emerged since 2019," Mr. Wang recalled that he only occasionally paid attention to the Vietnamese stock market at that time, but the new crown epidemic changed the investment methods of many people, and he also began to think about the tricks of the Vietnamese stock market. "Maybe it is because of the impact of the new crown epidemic that investment in other fields has been affected to a greater or lesser extent. Sitting at home and paying attention to stocks and letting the money in your hands go to the place where 'money makes money' is the most cost-effective," Mr. Wang told reporters.

As the popularity of Vietnam's stock market increases, Chinese people in Vietnam first began to pay attention to the stock market. Mr. Wang’s friend Ms. Shi works in Ho Chi Minh City, Vietnam. Under Mr. Wang’s introduction, Ms. Shi also began to trade stocks in the Vietnamese stock market. Ms. Shi said that she works in Vietnam, so she can easily open an account with the local "face-to-face" and if cross-border remote transactions are required, the online transaction function must be activated.

In order to improve stock market trading liquidity, promote stock market expansion and attract more investors, the Vietnamese Ministry of Finance approved the adoption of "T+0" trading in February 2021 (that is, stocks can be sold on the same day - Editor's note). Open an account for free when entering the market, and it is also more convenient to make an appointment by email. Mr. Wang and Ms. Shi both told reporters that although there is still a big gap between the Vietnamese financial market and the stock market in developed countries in terms of technology, such as sometimes web pages will be stuck and transactions are not smooth, but in recent years, as more and more "retail investors" have entered the market, the Vietnamese stock market has been continuously improving technology and "visible to the naked eye".

With the support of technology, Vietnam's stock market has been rising. Data shows that from the beginning of 2021 to early June, the Ho Chi Minh Index rose by more than 20%. "At that time, the exchange system was paralyzed," Ms. Shi said, "I saw this scene for the first time in my life." When many Vietnamese friends around her began to inject large amounts of "idle funds" into the stock market one after another, she noticed that foreign capital was also constantly withdrawing from the Vietnamese stock market.

Bloomberg said that in the first half of this year, Vietnam's stock market ranked first in the world in terms of growth. Foreign capital once believed that Vietnam's macroeconomics were improving and the currency exchange rate was stable, so it continued to flow into the country. However, after the domestic epidemic in Vietnam intensified and foreign capital made profits in the financial market, foreign investors began to sell Vietnam's financial assets in large quantities. In the first half of this year, foreign investors sold nearly 36 trillion Vietnamese dong (approximately RMB 10.1 billion), which was 225% of the same period last year. As July began, Vietnam's stock market fell significantly, and amid the intensified epidemic, Vietnam's stock market suffered a panic selling. On July 12, Vietnam's major stock indexes fell by nearly 6%. In just a few days, the stock market fell sharply by about 10%. Since then, the stock market has repeatedly tug-of-war at the trough. The stock market has turned to rebound since August, but the amplitude is not large.

"Generally speaking, the stocks that have risen sharply have also fallen the most recently!" Ms. Shi told reporters.The stocks that Ms. Shi said that "has risen sharply" mainly include Vietnam's energy industry, light industry, electronic retail industry and banking industry. This is also a local industry in Vietnam that has always had a great impact on the market. At the beginning of 2021, due to the impact of the epidemic on investment in various real industries, many local retail investors flocked to the Vietnamese stock market in large quantities. Stocks in these four aspects soared, among which Vietnamese banking stocks rose across the board, "raised" under the sluggish global stock market, but also suffered a great impact in the subsequent decline.

Analyst of Vietnamese local securities companies Nguyen Qingxian said that foreign capital, which has made a lot of money in the Vietnamese stock market this year, has gradually safely withdrawn from the Vietnamese market while the stock market is still rising, and will cash out all the profits. Due to the sharp rise in Vietnam's stock market, a large number of retail investors who saw the money-making effect poured into the stock market, and the "trading" left by foreign capital was taken over by retail investors.

Although the stock market has rebounded slightly, Ms. Shi still advises her friends to keep their attention to light industry, banking and other stocks, but don’t enter the market with the mentality of “ bottom-buying ”. She concluded that the securities market is closely linked to the industry at any time. Once the industrial production in a place is affected, no matter how beautiful the data is, it will be just a bubble. For the Vietnamese stock market, "bear" and "bull" can sometimes be reversed in a moment.