Since the first securities trading on July 28, 2000,the stock market has become more and more attractive to investors because the quantity of goods is getting diversified and the quality is improving.

Vietnam's stock market has had 20 years of growth and development. Photo: Internet

Focusing on quantity

The Ho Chi Minh City Securities Trading Center (the forerunner of the Ho Chi Minh Stock Exchange) started the first trading session with only two stocks, namely REE and SAM, on July 28, 2000.

By the end of 2000, the stock market had five listed stocks with a total of 32.1 million shares, and the market capitalization was only VND986 billion, accounting for 0.28% of GDP. Although this was an effective capital raising channel, the number of listed companies increased slowly during 2000-2005.

The stock market has grown strongly since 2006 after the Hanoi Securities Trading Center came into operation and became a stock exchange for small and medium businesses, in addition to the Ho Chi Minh City Securities Trading Center that listed large capital enterprises. Moreover, the first Securities Law passed by the National Assembly and came into effect on January 1, 2007 has gradually improved its inadequacies and conflicts with other legal documents.

At this time, the Ho Chi Minh City Securities Trading Center changed its model into the Ho Chi Minh City Stock Exchange and officially applied continuous matching from July 30 to create liquidity for the market.This has prompted a wave of listing and equitizing large enterprises associated with listing on the stock market. And then, the presence of some big companies such as Vinamilk, Sacombank, Vietcombank, and Bao Viet Corporation pushed the market up and attracted a large number of investors.

According to statistics, by the end of 2019, Vietnam's stock market had 1,622 stocks and fund certificates listed or registered for trading, including 750 stocks and fund certificates listed on both Stock Exchanges and 872 stocks registered for trading on UPCOM. Most impressively, the capitalization on Vietnam's stock market reached about VND4,384 trillion, equivalent to 72.6% of GDP in 2019.

By 2008-2009, the market indices fell sharply due to the global financial crisis, but the number of listed companies increased steadily every year. Especially, after the Hanoi stock exchange had opened the operation of the unlisted public securities trading market (UPCOM) on June 24, 2009, the number of companies listed and registered for trading on the stock exchange increased fast.

Quality comes first

According to the State Securities Commission, in addition to growing the number of listed companies, the stock market is increasingly towards the "quality" factor through developing the stock market on many levels (listed market and unlisted market), developingstricter regulations on financial conditions for listed companies, strengthening regulations on corporate governance to improve the quality of listed companies; and promotingequitization of large state-owned enterprises associated with listing on the stock market.

Over the past five years, the scale of listed companies has increased fast, from one enterprise with market capitalization of over US$1 billion, by the end of 2019, this number was more than 30 enterprises on the two Stock Exchanges.

After 20 years of development, Vietnam's stock market has been affirming its position as an important medium and long-term capital mobilization channel for businesses and the economy.

Besides stocks, the market has other investment tools such asinvestment fund certificates, ETF and REIT fund certificates, and Covered Warrants. Thus, the structure of the stock market has been relatively complete so far, including capital mobilization markets (stock market and bond market) and risk-dispersion market (derivatives market) with products that are more diverse than two decades ago.

It can be said that diversifying and improving the quality of products on the stock market is always one of the important goals in the solution group to develop Vietnam's stock market.According to the State Securities Commission, in the next decade, the regulator will continuously focus on increasing the supply of goods associated with improving the quality and developing a diverse range of products across all the three markets: the stock market, the bond market and the derivatives market.This becomes more special when Vietnam's stock market is facing great opportunities for developmentwhen the new Securities Law was passed by the National Assembly and will take effect from January 1, 2021, together with a new legal system under the Law, which replaces the previous legal document system to meet the development requirements of the stock market.

Furthermore, the State Securities Commission has completed construction and is about to put into operation a new technology infrastructure system (trading system, payment system, and monitoring system) for Vietnam's stock market.It has a more comprehensive, modern technology platform and allows the deployment of many new tasks.In the future, the restructuring of the stock market with the merging of the two Stock Exchanges into one unit with a larger and more professional scale, associated with the segmentation of market will be an important premise to support and promote the development of the stock market, diversify new products and business activities, and movecloser to international standards and practices.