In 2021, the Vietnamese stock market is expected to continue to receive positive support from economic growth and other macro factors. Enterprises the gradual opening up for the stock market in Vietnam.

Vietnam's stock market is considered as one of the 10 best recovering
stock markets in the world in 2020. Photo: Internet source. 

Many innovations expected

In 2020, Vietnam's stock market is considered to be one of the top ten most resilient stock markets in the world in the context that the world economy in general and securities in particular were strongly affected by the Covid-19 pandemic.

This result is due to the Government's good control of the pandemic and quick measures to restore the economy. The year 2020 is also a memorable year in administration as well as market support.

During the complicated period of the Covid-19 pandemic, causing a lot of confusion for investors, Vietnam was one of few countries that took drastic action to reassure investors and support the market.

At that time, the Government as well as the Ministry of Finance were consistent with the policy of no administrative interventions in the market and considered securities an essential industry, since then, there have been many appropriate management and support solutions.

With these achievements, 2021 has opened up with confidence and hope for both listed businesses and investors. It is built by a belief in governance. Moreover, for the stock market, 2021 will be a promising year for many innovations and improvements in market operations.

First of all, during the Lunar New Year 2021, the Ho Chi Minh City Stock Exchange (HOSE) will "test" to check the new stock market information technology system (the KRX) with securities companies.

According to Mr. Tran Van Dung, Chairman of the State Securities Commission, this is a system by the South Korea Stock Exchange (KRX) to completely change the information technology platform of the Vietnamese stock market in order to meet needs in the future.

After the new system comes into operation, Vietnam’s stock market can conduct intraday trading, T + 0, central clearing counterparty (CCP - the basis to be able to deploy policy that investors only need 20-30% of the money to buy stocks instead of having 100% of the money).

Along with the trial operation of the new system, the decision on the establishment of the Vietnam Stock Exchange will officially take effect from February 20, within two years, to complete the operation model. In 2021, the management agency will perfect the related elements such as: statute, charter and operation organization.

In particular, in 2021, the Securities Law officially took effect. The State Securities Commission is continuing to improve guiding documents with the aim of creating a transparent and professional environment and creating maximum favorable conditions for businesses and investors.

Toward the goal of upgrading status

In 2021, the Vietnamese stock market is expected to continue to receive positive support from economic growth and other macro factors. However, the economy in general and the stock market are forecasted to face many challenges due to the Covid-19 pandemic, trade tensions that have not abated and financial risks. In that context, the State Securities Commission gave specific solutions, drastically implemented in the early days and first months of 2021 to both improve the effectiveness and efficiency of state management and support the stock market to develop stably and sustainably in the new year.

According to the leader of the State Securities Commission, one of the important tasks of the regulator is to continue to implement solutions to remove difficulties for businesses, promote equitisation and divestment of state-owned enterprises, associated with listing on the stock market to increase the size and quality of goods for the stock market, promote market size and liquidity, and introduce new products.

In parallel, the Commission will strengthen the capacity of state management agencies to supervise, manage and enforce the securities market in accordance with international practices and standards.

With the support of regulators, in 2021, the Vietnamese stock market is expected to continue gaining points and setting new records.

Currently, Vietnam is taking many steps to get closer to the goal of upgrading its status. In particular, FTSE Russell kept Vietnam on the upgrade track during the last meeting. The Securities and Exchange Commission has also provided a lot of information for MSCI to prepare for the evaluation.

According to Mr. Tran Van Dung, with the premise that we are building and completing, by 2022, Vietnam will meet the requirements to upgrade to emerging market and as early as 2023 – 2024.