Vietnam was still attractive to investors in 2019 despite global caution about US President Donald Trump’s policies.
Many new products were put on the market in 2019. However, transactions in the market did not see improvement compared with the year before.
SK Group spent $1 billion to acquire 6.15 percent of Vingroup shares
Unpredictable events and global investors’ cautiousness were the reasons behind the quiet market.
However, the market in 2019 still witnessed records and positive events.
The two most outstanding aspects of Vietnam’s stock market have relations to market development policies.
According to Tran Van Dung, chair of the State Securities Commission (SSC,) the new Securities Law was ratified in November and will take effect on January 1, 2021. It lays a foundation for the stock market to develop strongly in the time to come.
|With an aim to reshuffle the stock market, the Prime Minister approved the plan on restructuring the stock and insurance markets by 2020, with a vision until 2025. This will bring more goods, including bank securities, to the trading floors.|
With an aim to reshuffle the stock market, the Prime Minister approved the plan on restructuring the stock and insurance markets by 2020, with a vision until 2025. This will bring more goods, including bank securities, to the trading floors.
Also according to Dung, the stock market in 2019 saw robust development of the bond market with the corporate bond boom and the unprecedented strong rise of the government bond market.
The government bond interest rate decreased sharply in 2019, while longer-term bonds (10-year, 15-year and 30-year) appearing in the market. The daily trading value in the bond market was higher than the stock market.
The most noteworthy deals were in private offering campaigns. SK Group spent $1 billion to acquire 6.15 percent of Vingroup shares, while Singapore GIC bought 14 million Masan shares and KEB Hana Bank bought 15 percent of BIDV shares worth $882 million.
Also in 2019, Vietcombank completed the sale of VCLI insurance joint venture to FWD, while Sumitomo Life bought 41 million BVH shares worth $173 million.
Pham Chi Quang from the State Bank said many large press agencies in the world listed Vietnam among top 8 destinations for the world’s investors thanks to stable macro economy.
Vietnam’s stock market did not see breakthrough growth in 2019, but the VN Index still increased by 7 percent thanks to the stable economy, high GDP growth rate of 7 percent and low inflation rate of below 4 percent.
Nhu Dinh Hoa, CEO of Bao Viet Securities, said the net purchase value by foreign investors in the secondary market was estimated at VND6 trillion. Private offering deals proved to be more significant and there were some big deals worth $2.6-2.7 billion.
SSC, the Securities Depository Center, investment funds and securities companies all believe that the market will be brighter in 2020.
The Vietnamese stock market has been growing rapidly with market capitalization value exceeding 100 percent of GDP.
Masan has announced that after the share swap deal with Vingroup, it now owned 83.74% of Vingroup’s subsidiary VCM Services and Trading Development Joint Stock Company (VCM) which operated Vinmart and Vinmart+ stores.