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Vietnam’s Stock Market, December 2023: Snapshot

December began with the government of Vietnam tapping the United Arab Emirates on the shoulder for support turning Ho Chi Minh City into a financial hub in Southeast Asia. Whereas the UAE was mum on whether it would provide support, the request was also scant on details, and it was not clear exactly what Vietnam was asking for. That said, challenges facing the Ho Chi Minh City Stock Exchange, which would presumably form the backbone of said financial hub, are mostly regulatory at this point–money and expertise do not appear to be the problem but rather political will.

Also in December, another drop in stock trading accounts was reported. Whereas there were 7,445,544 accounts at the end of October, at the end of November there were just 7,252,743, a decrease of 192,081. This is likely connected to big securities firms clearing out unused accounts similar to what happened in November

On the northern bourse, the Hanoi Stock Exchange, 44 stocks were suspended from trading. This was due to the failure of these firms to provide financial statements. Among them was APAX Holdings, most well known for its English centre chain that regularly fails to pay staff and suppliers for months at a time. APAX was delisted from the Ho Chi Minh Stock Exchange in November and was moved to the lower-tier Hanoi Stock Exchange only to be immediately suspended from trade.

Foreign traders continued to net-sell out of the HoSE. Year to date in December this was to the tune of over US$1 billion but notably, it has continued to climb. In fact, in a single day (December 15) over US$60 million worth of HoSE stocks were net-offloaded by foreign traders.

On that note, the State Securities Commission announced that from the end of June 2024, securities trading firms would no longer be permitted to pay interest on unused funds sitting in trading accounts. It’s not clear what the logic is in this development, but the outcome will likely be that this will discourage traders from keeping funds in their accounts. This may see foreign traders forced to choose between reinvesting funds or repatriation of funds–notably moving funds in and out of Vietnam is not always that easy.

But this was not the only problem for investors in December. Vietnam News was also reporting that low-liquidity was making investors reluctant to enter the market presumably because they may not be able to get back out. Notably, the publication was a little short of evidence to support this claim, simply referencing ‘analysts’. 

On the flip side, however, local trading firm Tien Phong Securities was arguing that the HoSE was well poised for more investment. The firm cited low interest rates, a market price-earnings ratio of nine-to-one, a pending upgrade of the HoSE from frontier to emerging, and the introduction of a new trading system from South Korea dubbed the KRX.

That said, it’s worth noting that it was announced at the end of December that the launch of the KRX had been delayed. Originally slated to go online December 25, firms were advised this would not be the case with approvals still required from the authorities and 87 percent of trading firms not ready to move to the new system. There does not seem to be a new scheduled launch date, however, there has been some speculation that it could be around the second quarter of 2024.

Moving forward, stock market trading activity should be relatively low given the build-up to Tet. The local press has mentioned the January Effect, however, like trading dips in the lead-up to Christmas it’s possible it will be the same for the Lunar New Year. 

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VN-Index, historic data, December 2023

DayLastOpenHighLowChange
1/12/20231,102.161,094.131,102.201,090.080.73%
4/12/20231,120.491,102.161,123.961,102.161.66%
5/12/20231,115.971,120.491,124.111,113.55-0.40%
6/12/20231,126.431,115.971,126.431,115.970.94%
7/12/20231,121.491,126.431,129.831,109.51-0.44%
8/12/20231,124.441,121.491,127.461,119.430.26%
11/12/20231,125.501,124.441,129.151,120.320.09%
12/12/20231,127.631,125.501,129.771,123.350.19%
13/12/20231,114.201,127.631,131.211,112.08-1.19%
14/12/20231,110.131,114.201,120.361,107.86-0.37%
15/12/20231,102.301,110.131,112.791,102.30-0.71%
18/12/20231,091.881,102.301,103.741,091.45-0.95%
19/12/20231,096.301,091.881,096.301,082.290.40%
20/12/20231,100.761,096.301,102.271,093.380.41%
21/12/20231,102.431,100.761,102.431,094.470.15%
22/12/20231,103.061,102.431,104.651,099.320.06%
25/12/20231,117.661,103.061,118.311,103.061.32%
26/12/20231,122.251,117.661,123.111,117.660.41%
27/12/20231,121.991,122.251,126.471,121.99-0.02%
28/12/20231,128.931,121.991,130.581,120.500.62%
29/12/20231,129.931,128.931,135.051,128.930.09%

Foreign investor trades on HoSE, December 2023

BuySellChange
DateVNDUS$VNDUS$VNDUS$
1/121,184$48,484,8001,567$64,168,650-383-$15,683,850
4/12882$36,117,9001,462$59,868,900-580-$23,751,000
5/12569$23,300,5502,127$87,100,650-1,558-$63,800,100
6/121,272$52,088,4001,820$74,529,000-548-$22,440,600
7/121,514$61,998,3002,331$95,454,450-817-$33,456,150
8/121,175$48,116,2501,625$66,543,750-450-$18,427,500
11/121,135$46,478,2501,569$64,250,550-434-$17,772,300
12/121,059$43,366,0501,367$55,978,650-308-$12,612,600
13/121,530$62,653,5002,445$100,122,750-915-$37,469,250
14/121,946$79,688,7002,304$94,348,800-358-$14,660,100
15/122,477$101,433,1503,945$161,547,750-1,468-$60,114,600
18/122,909$119,123,5503,679$150,655,050-770-$31,531,500
19/121,121$45,904,9501,587$64,987,650-466-$19,082,700
20/123,116$127,600,2003,528$144,471,600-412-$16,871,400
21/12911$37,305,4501,445$59,172,750-534-$21,867,300
22/121,007$41,236,6501,514$61,998,300-507-$20,761,650
25/12706$28,910,700828$33,906,600-122-$4,995,900
26/121,088$44,553,6001,398$57,248,100-310-$12,694,500
27/12953$39,025,350839$34,357,050114$4,668,300
28/121,223$50,081,850780$31,941,000443$18,140,850
29/121,282$52,497,900940$38,493,000342$14,004,900
Total29,059$1,189,966,05039,100$1,601,145,000-10,041-$411,178,950

 

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