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Stock market size reaches 88% of GDP

Vietnam's stock market reached approximately 87.68 per cent of the country’s Gross Domestic Product (GDP) as of the end of 2020, the highest rate reported so far.

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An overview of the Aqua City project developed by Novaland in the southern province of Dong Nai. Novaland is among companies whose capitalisation is valued at billions of dollars on the market. — Photo novaland.com.vn

The other two high rates recorded were in August 2018 at 84.57 per cent and March 2018 at 83.08 per cent.

Including the government bond market and corporate bond market, the value of Vietnam’s entire stock market by the end of 2020 exceeded 110.64 per cent of GDP, this is also the highest rate ever recorded.

New cash flow continuously pouring into the market since the second half of 2020 has boosted liquidity. December 2020 and January 2021 were two months witnessing record matching value, of more than VNĐ250 trillion (US$10.8 billion) and more than VNĐ300 trillion on the Ho Chi Minh City Stock Exchange (HoSE), respectively.

However, skyrocketing liquidity has far exceeded market forecasts, leading to frequent congestion in many sessions, causing a lot of trouble for investors and affecting the quality of the market.

The sudden increase in liquidity is unpredictable, causing undesired interruptions in trading, according to HoSE.

To tackle this issue, the State Securities Commission said it was speeding up the implementation of a new information technology system for the entire stock market, known as KRX.

The Vietnamese stock market has experienced a year of spectacular recovery from the bottom caused by the COVID-19 crisis, a trend that is in parallel with most of the major stock markets in the world. Since the bottom at the end of March 2020, the VN-Index has increased by nearly 50 per cent. 

Billion-dollar companies

So far, the Vietnamese stock market recorded 38 companies whose value reaches billions of dollars. Vingroup is valued at $15.95 billion in market capitalisation. It is followed by the State-owned Vietcombank (VCB), with $15.82 billion. Third place belongs to Vinhomes (VHM) with $14.52 billion.

Other notable names include Vinamilk with $9.52 billion, Bank for Investment and Development of Vietnam (BID) with $7.62 billion, PetroVietnam Gas JSC (GAS) with $7.43 billion, the Airports Corporation of Vietnam (ACV) with $7.03 billion, and Hoa Phat Group (HPG) with $6.56 billion.

The Masan family is no less competitive as there are also three representatives, Masan Group (MSN) with $4.61 billion, Masan Consumer Holdings (MCH) with $2.92 billion and Masan High-Tech Materials Corporation (MHT) with $1 billion.

Some unfamiliar names also appear in the billion-dollar business group, with surprises in value. Most notably ThaiHoldings (THD) valued at $3.06 billion, became the third largest real estate company in the market by market capitalisation after Vinhomes and Novaland, the latter of which is valued at $3.41 billion.

Another real estate company has also entered the group, namely Phat Dat Real Estate Development Corporation (PDR), valued at $1.08 billion.

THD shares have risen 10 times since the end of November last year, now reaching VND201,000. While PDR has also nearly tripled from August last year, standing at VND63,000.  VNS

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