Vietnamese stock market hit an all-time high

DNHN - The VN-Index is likely to head towards 1,600-1,800 points in 2022 as foreign capital flows into the country and the economic recovery accelerates.

Growth prospects

Last year, the Vietnamese stock market boomed in terms of market value, size, and liquidity. According to data from the State Securities Commission, by December 28, 2021, the VN-Index reached 1,494.39 points, an increase of 35.4% compared to the end of 2020, while the HNX-Index ended at 458.05 points, up 125.5%. Vietnam's stock market capitalization increased 46 percent from the end of 2020, reaching 7,729 trillion VND. This is equivalent to 122.8 percent of the country's gross domestic product (GDP) in 2020 and 92 percent in 2021.

The number of new trading accounts reach more than 1.5 million in 2021, higher than the total of the previous four years. Several sessions of the Vietnamese stock market hit several billion US dollars in 2021 and the VN-Index hit historic highs.

Up to 537 tickers were traded on the Ho Chi Minh City Stock Exchange (HoSE) on January 28, 2022, with a market capitalization of more than 5,700 trillion VND, equivalent to 68.67% of GDP as of January 28, 2022. 2021 (GDP at current prices).

The first trading day of 2022 had 110 stocks hitting the daily limit high. Mr. Phan Van Mai, Chairman of the People's Committee of Ho Chi Minh City, said on February 8 that the city will promote equitization and listing of reputable shares on the stock market. The city will also strive to become a regional and international financial center, he said. 

Foreign capital increases again

James Estaugh, Director of Securities Services at HSBC Vietnam, said that the Vietnamese stock market was hit by a record-high net selling by foreign investors in 2021, worth 62,358 trillion VND. However, foreign capital inflows will return in 2022. Although the Vietnamese stock market is considered small, its average daily trading value has been increasing continuously. In 2021, the average transaction value reach 25.96 trillion VND (equivalent to about 1.13 billion USD) per day, an increase of 250% over the previous year, compared with 2 billion USD, 800 million USD, 500 million USD. and $100 million per day in Thailand, Indonesia, Singapore, and the Philippines respectively.

Michael Kokalari, Chief Economist of VinaCapital, said that the Vietnamese stock market will thrive in 2022 as it continues to receive support from foreign capital flows and Vietnam's economic recovery. VinaCapital's investment strategy is to identify stocks and sectors that will benefit from Vietnam's economic recovery, including non-essential consumer goods, fi, nance, and real estate.

Newly promulgated regulations and policies of the Securities Law and guiding documents are also expected to support businesses and protect the legitimate rights and interests of investors.

Dung Nguyen