Foreign investors' securities portfolio in Vietnam swells 9% in 2018
Updated at Thursday, 03 Jan 2019, 15:25
The Hanoitimes - The stock market continued to be an efficient capital mobilization channel for Vietnam’s economic development.
The investment portfolio value of foreign investors in Vietnam is estimated at US$35.3 billion as of December 20, 2018, up 8.9% against the end of 2017, according to State Securities Commission.
Notably, foreign indirect investment (FII) reached a net value of US$2.8 billion, slightly down from the record high of US$2.9 billion in 2017.
Vietnam’s stock market capitalization in 2018 reached nearly VND3,900 trillion (US$167.06 billion), up 10.6% year-on-year or 70.2% of the 2018 GDP and exceeding the target of 70% of the GDP set for the stock market in the 2011 – 2020 period, stated Minister of Finance Dinh Tien Dung.
The average stock transaction value in each trading session stood at VND6.5 trillion (US$278.44 million), up 29% year-on-year, Dung said at a meeting on January 2.
In the bond market, total value listed amounted to VND1,120 trillion (US$47.97 billion), up 10.5% year-on-year or 20.3% of the GDP, while the daily bond transaction value reached VND8.83 trillion (US$378.22 million).
Moreover, the country’s derivatives market with the launching of the VN30-Index future contracts averaged 78,800 per trading session, up seven times against 2017.
In the first nine months of 2018, public companies posted increases of 20.5% in revenue and 24.9% in profit. Securities companies generating after-tax profit increased by 40% year-on-year.
The stock market continued to be an efficient capital mobilization channel for economic development, in which government bonds and government-guaranteed bonds stood at VND192 trillion (US$8.22 billion) with maturity terms averaging 12.55 years, Dung continued.
Capital mobilization from share and corporate bond issuance, privatization and divestment totaled VND62.2 trillion (US$2.66 billion), up 30.7% year-on-year.
In 2018, Vietnam leaped to the top of Southeast Asia’s initial public offering (IPO) ranking with five IPOs raising US$2.6 billion, CNBC reported. The US$1.35 billion IPO by real estate firm Vinhomes was the largest ever in the country and was Southeast Asia’s second-biggest of 2018.
With the Vietnamese government expected to sell its stake in more companies, the country could very well remain at the top of Southeast Asia’s IPO league, according to a report from Baker McKenzie and Oxford Economics.
Vietnam's effort to raise funds from the public-sector reforms is expected to triple in 2018 - 2020 compared to levels seen in the 2011 - 2017 period, according to Saigon Securities Inc (SSI), the largest brokerage house in the country.
Specifically, the total proceeds from IPOs and the share sales of SOEs in the next two years are expected to reach US$26.3 billion, 2.75 times higher than the sum raised for the whole period between 2011 and 2017.
Of the total, the value of IPOs will reach US$9.7 billion, while the total amount of divestment could hit US$16.6 billion.
"Vietnam could end up being the only country in the world that embarks on a new wave of SOE reform in 2018 - 2020, placing large and profitable SOEs on public offer," stated SSI.