Due to a surge in transaction orders that is putting the system at risk, the Ho Chi Minh Stock Exchange (HoSE) decided to suspend today’s afternoon session [June 1].

An investor at a securities company in Hanoi. Photo: Viet Linh

HoSE decision was taken after the conclusion of the morning session on the same day.

“At this morning session, the market liquidity at HoSE exceeded VND21.7 trillion (US$944.8 million), triggering the system alarm,” noted the HOSE in a document, adding it had received the approval from the Chairman of the State Securities Commission of Vietnam (SSC) before calling for a halt of the market operation on June 1.

This was the first time that HoSE has decided to “pull the plug”, instead of letting the system overload shut down the market as in previous crashes.

Market liquidity has been on the rise in the last few trading sessions after the benchmark Vn-Index surpassed the 1.300-mark. In the last two sessions, the average transaction value in the morning session alone went up to nearly US$1 billion.

In yesterday session [May 31], the combined value of matching orders on all three stock exchanges of HoSE, Hanoi Stock Exchange (HNX), and Unlisted Public Company Market (UPCoM) reached a record high of VND30.07 trillion (US$1.3 billion), in which the HoSE made up a major part of VND23.76 trillion (US$1.03 billion), followed by the HNX (VND4.36 trillion or US$190 million) and UPCoM (VND1.98 trillion or US$86.2 million).

Stock exchange data revealed all 20 trading sessions in May having transaction values of over VND20 trillion (US$867.8 million). In the HoSE, the average figure stood at an all-time high of VND20.48 trillion (US$892 million), up 22% against April.

In order to solve the overload issue, the HoSE has been working with IT firm FPT on a temporary transaction system capable of processing up to five million transaction orders per day, which is scheduled to launch in late June/July.

The HoSE also encourages public firms to temporarily switch stock transactions to the HNX to relieve pressure on the system, however, it proves ineffective as money continues being pumped into the stock market.

In a four-month period, the number of new securities accounts opened by local investors surged by 90% year-on-year to nearly 370,000.