Stock market sets new record on billion dollars of capital inflow

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A recent report from Vietnam Securities Depository (VSD) showed that in December, domestic investors opened 226,580 new securities accounts, an increase of more than 6,000 compared to the previous month. 

By the end of 2021, domestic investors opened a total of more than 4.27 million accounts, of which retail investors accounted for nearly 4.26 million. 

Meanwhile, foreign investors opened 39,510 accounts.

Thus, in 2021, investors opened 1.5 million new accounts, mainly of domestic individual investors. The amount is equal to the combined amount over the last four years. 

VSD said that this is an important factor helping the stock market increase strongly last year, reaching a record at the 1,500-point level.

Tran Van Dung, Chairman of the State Securities Commission of Vietnam (SSC), said that the 1.5 million new accounts opened in 2021 have a much higher quality than before in terms of transaction size and do not use as much margin as before. Individual investors are the group leading the stock market to a record high in 2021, he added.

The country’s stock market recorded extraordinary performance with all indices of the three exchanges skyrocketing compared to the end of 2020. The exchanges are the Ho Chi Minh City Stock Exchange (HoSE), the Hanoi Stock Exchange (HNX) and UpCOM. 

Accordingly, the market benchmark VN-Index surged by 394.41 points, equivalent to 35.7%, to 1,488.88 points.

The HNX-Index climbed 133.3% to 473.99 points while the UpCOM-Index rose by 51.3% to 112.68 points.

Liquidity in 2021 was 2.6 times higher than that of 2020, reaching VND26.6 trillion per session (US$1.17 billion). In September, the trading value continuously crossed over US$1 billion, with some sessions reaching US$2 billion. 

The stock market capitalisation reached VND7.77 quadrillion last year, up 46.8% year-on-year, reaching 123% of the unadjusted 2020’s GDP and 92.6% of the adjusted GDP.

The strong cash flows into the stock market last year was thanks to low bank interest rates in recent years and less attraction to other investment channels. 

Besides, securities became an attractive and widely known investment channel, and the opening of new accounts is also easier due to e-KYC technology.

With cash flow still as strong as at the beginning of the new year, the stock market is forecast to set new highs. Many large enterprises made breakthroughs in the difficult year of 2021 and have good prospects going into 2022.

Opening the first trading day of the New Year, the VN-Index once again broke over the 1,500-point level, boosted by bullish sentiment. It continued to hit a new record high at 1,528.57 points in the third session of the year, before falling below 1,500.

Analysts from VNDirect said that the growth of listed businesses’ profits will continue to support the VN-Index, therefore, the Vietnamese stock market can grow higher this year.

The securities firm expects the market’s benchmark may hit new peaks at around 1,700 – 1,760 points in 2022, on the basis that price-per-earning (P/E) valuation is at 16-16.5 times and the profit growth of all enterprises is 21%.