Vietnam’s new securities accounts in April stood at over 230,000, the second-highest number in a month after the 270,000 recorded in the previous month.

Investors at a securities company in Hanoi. File photo

As of the end of April, Vietnam’s stock market has over 5.2 million securities accounts, of which retail investors make up 98.9%.

Such a number is equivalent to 5.24% of the population according to the statistics from the General Statistics Office by late 2021, and exceeded the target of 5% set by the Government for 2025.

The figure, however, remains modest compared to other Asian countries and territories, like Thailand, for example, which has 5.3 million securities accounts, or 8% of the population of Taiwan (China),  whereby late 2021, over 22 million people have invested in the stock market, or 93% of the population.

Securities companies suggested domestic investors continue to be the main growth driver for the market in the past year, contributing to 80% of total transactions.

Domestic investors, nevertheless, have changed their stance in April from net buyers to net sellers for the first time after four months with an amount of VND4.68 trillion (US$204 million) as the market underwent a correction phase.

In return, domestic and foreign organizations have bought in a net amount of VND770 billion ($33.5 million) and VND3.9 trillion ($170 million), respectively.

“In the short term, individual investors are unlikely to make a large investment in the market, given the lack of supporting information in May,” stated the Viet Dragon Securities Company in a report.

The average liquidity in April stood at a modest VND15.6 trillion ($680 million), much lower compared to the VND23-25 trillion ($1-1.1 billion) in late 2021.

Promoting sustainable development of stock market

According to the Ministry of Finance, Vietnam’s stock market has developed at a fast pace over the years and remained one of the key capital mobilization channels for economic development.

Vietnam’s stock market size stood at 92.1% of the GDP, and that of the bond market at 38.45%, of which the corporate bond market was at 14.1%.

The rapid development of the market, however, exposed shortcomings, such as stock market price manipulation or violation in corporate bond issuance.

In this context, Deputy Minister of Finance Nguyen Duc Chi said the ministry is committed to ensuring the healthy development of the market and protecting the lawful rights of investors.

Among key solutions, Chi said there should be a focus on raising the quality of market products and promoting market discipline.

“In the short-term, the Government would continue to support businesses and the market to overcome impacts from the pandemic by simplifying administrative procedures and lower securities fees,” he added.

Meanwhile, Government aims to turn the corporate bond market into a sustainable and key capital mobilization channel for businesses, while setting a clear line between public and private bond issuance.

Chi expected the ministry to soon propose a revision of existing regulations on bond issuance and a clear concept on professional securities investors under the Securities Law.

“The Government’s stance is to promote a transparent, stable, and sustainable development of the stock market, with ensuring lawful rights and benefits of all parties involved as the main objective,” Chi added.

Chi stated recent strict measures on cases of violation in the stock market would have no impact on the vision and objectives of its development course.