The 21-year journey of the US$230 billion stock exchange
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With a market capitalization of VND1,000 billion and only about 3,000 accounts, HOSE currently has a market capitalization of up to US$230 billion and nearly 3.4 million accounts.
Record numbers
HOSE has recorded unprecedented results within its 21 years of operation. The VN-Index increased from 100 points on July 20, 2000 to a record high of 1,420.27 points on July 2, 2021.
The VN30 index - measuring the 30 largest stocks in the market - hit a peak of 1557.41 points on July 5, 2021.
The liquidity skyrocketed and reached a record in the first half of 2021 with the largest trading volume of more than 995 million shares on April 13, 2021 and a record trading value of nearly VND34.9 trillion on May 18.
From a capitalization of about VND1,000 billion in 2000, HOSE recorded a market capitalization of more than VND5.3 quadrillion (equivalent to nearly US$230 billion) on July 2, 2021.
In its 21-year history of operation, HOSE witnessed the trading session with the highest value share auctioned of nearly VND110 trillion (about US$5 billion) from the divestment of state capital at the Saigon Beverage Joint Stock Corporation (Sabeco) on December 18, 2017.
VN-Index hits record
In 2021, the stock market of Vietnam set a series of records: the VN-Index conquered the peaks of 1,300 points and 1,400 points. In the first 6 months of the year, this index had a spectacular increase of nearly 28% to become the 2nd strongest growing stock index in the world, just behind the Abu Dhabi stock index.
In a one-year period (from July 1, 2020 to June 30, 2021), VN-Index was the world's strongest stock index with an increase of nearly 70%.
The market saw the bank stock group returning to the top position with many banking shares rising from from 50 to 80% in the first half of the year, becoming the main driving force pulling the stock market up.
Thanks to the highly profitable business in recent years, the return on price per share (P/E) of HOSE stocks as of the end of June 2021 was still better than the historic peak set in early 2018 (P/E of around 22).
New investors
A highlight of the Vietnamese stock market in the past two years has been the interest of domestic and foreign institutional and individual investors. The number of newly opened accounts (F0) skyrocketed, helping to increase liquidity to a record high.
In the first half of the year, domestic investors opened more than 620,000 securities accounts, higher than the total combined number of accounts in 2020 and 2019.
In June alone, the number of new accounts also hit a monthly record: over 140,000. The total number of securities accounts reaches nearly 3.4 million, or about 3.5% of the population.
The cash flow from F0 investors played an important role in helping the VN-Index break through strongly and surpass 1,400 points and market liquidity skyrocket, with the trading value of tens of sessions reaching billions of USD.
Foreign investors' interest in Vietnam's stock market was still great despite the trend of selling. In the first six months of 2021, foreign investors opened 277 new accounts.
The liquidity is very impressive. In 2020, the average liquidity on HOSE was around VND6.2 trillion per session, in 2021 this figure is nearly VND18.6 trillion per session. In June alone, the average liquidity on HOSE was up to VND23,697 billion per session, a record high number ever.
The record increase in liquidity led to the sad event: the system was jammed for months.
Many US$10 bil companies appear on the stock market
By June 30, 2021, on HOSE, there were 385 stock codes, two closed-end fund certificate codes, seven ETF certificates, 29 bond codes and 65 covered warrant codes. The total value of stock capitalization reached over VND5.3 quadrillion, accounting for nearly 93% of the country's stock market capitalization, equivalent to nearly 84% of GDP in 2020. HOSE currently has 73 member securities companies with more than 3.39 million accounts.
From only a few trillion-cap companies, the HOSE now has 37 VN100 enterprises with a market capitalization of more than US$1 billion. There are four enterprises with a capitalization of over US$10 billion, including: Vingroup (VIC), Vietcombank (VCB), VinHomes (VHM) and Hoa Phat Group (HPG). The Bank for Foreign Trade of Vietnam (Vietcombank) is still the one with the largest market capitalization of over VND420 trillion.
After three years, the market capitalization of VinHomes surpassed the parent company Vingroup (VIC). VinHomes now has a working capital of nearly VND400 trillion. Meanwhile, the value of Techcombank has surpassed both BIDV and Vietinbank. Recently, Techcombank's capitalization surpassed the VND200 trillion mark for the first time.
On HOSE, behind the four big names with a capitalization of over US$10 billion are: VietinBank, BIDV, Vinamilk, Techcombank, Novaland, PV GAS, VPBank, Masan, MBBank, Sabeco, FPT, Mobile World (MWG), Vincom Retail (VRE), Petrolimex (PLX), VietJet (VJC), HDBank (HDB), Phat Dat (PDR), Bao Viet (BVH), TPBank, Eximbank, SSI, POW and Khang Dien House (KDH).
Vietcombank surpassed Vingroup to the No. 1 position in terms of market capitalization from June 18 and continues to maintain this position.
Vinamilk is a company that goes against the market and is being passed by others in terms of capitalization. In the first half of 2021, its shares decreased slightly and the market capitalization fell to the 8th place with more than VND187 trillion.
Hoa Phat Group of billionaire Tran Dinh Long also recorded great progress thanks to the strong increase in stock prices in the rising wave of the steel industry. Meanwhile, PV Gas (GAS) benefited greatly from the news that oil prices increased beyond expectations.
System congestion: Weakness and delay
Order congestion on HOSE has been going on since late 2020 when the number of new investors increased dramatically.
A series of measures have been applied: increasing the trading lot from 10 to 100 shares or 10 to 100 fund certificates; temporarily transferring some listed companies from HoSE to HNX or many securities companies agreeing to restrict the correction/cancellation of orders.
These measures helped increase liquidity to over VND30 trillion per session and trading on Vietnam's stock market reached the top 3 in Southeast Asia.
However, order congestion continued to occur in May and June. In June, the liquidity on the Vietnam stock market reached over VND1 billion/session. Particularly on HOSE, liquidity rose by nearly 13 times in 1.5 years, surpassing other countries in the region and now ranks only behind Thailand and Singapore.
The liquidity increased rapidly while the old HOSE system, with a processing capacity of about 900,000 orders per day, was lower than about 30 million orders of the Hanoi Stock Exchange (HNX).
The Ministry of Finance selected the FPT Group to handle system overload at HOSE because this unit has had experience in building the trading system for the HNX. Meanwhile, the new information technology system for the entire stock market (KRX) is expected to be operational by the end of 2021.
Chairman of the State Securities Commission Tran Van Dung admitted that order congestion occurred on the HOSE was partly because of awareness. However, the authorities have tried to come up with many solutions and this will be a long-term solution in the near future.
Regarding the temporary system built by FPT and put into operation from July 5, the system capacity has increased three times, reaching 3-5 million orders/day. FPT brought the software used by the HNX system to HOSE and adjusted the trading system to match the HOSE.