Vietnam’s stock market started off November on an uncomfortable footing. Allegations of stock market manipulation had led to the authorities announcing a crackdown on the practice though details of exactly how this ‘crackdown’ would play out on a practical level were scant. That said, it was not unexpected. The head of FLC, the man at the centre of these allegations, had been arrested at the end of last year and a flurry of similar cases of nefarious stock market trading have been revealed over the last twelve months.

On that note, adding to the flurry in November, a Danang man was fined for using 76 accounts belonging to 21 investors to manipulate the price of a real estate firm listed on the Ho Chi Minh Stock Exchange (HoSE). He was subsequently banned from trading for two years and fined US$61,000.

This provides some interesting context for news that more trading accounts had been closed in October than new accounts had been opened. The bulk of the closed accounts, 543,753 out of 545,000, had been the result of MB Securities closing out accounts that had never been used. Harmless housekeeping sure, but it also brings into question the status of the other seven million or so trading accounts registered with the Vietnam Securities Depository and Clearing Corporation.

But stock market manipulation wasn’t the only challenge the local bourse was facing. One of Vietnam’s biggest food processing firms, Kido, was also fined in November for breaching a number of listing rules and regulations. These included disclosing information late, failing to report on how the funds raised through corporate bonds had been spent, and a lack of clarity around the remuneration packages of board members. All up the firm was fined US$9,660.

It wasn’t just local disclosure breaches that were causing problems for stocks in Vietnam either. On November 17, local press reported that a drop in the VN-Index had been caused by news that a possible lawsuit was in the works in the US against Vietnam’s homegrown electric car maker VinFast for delayed disclosures. As part of the country’s biggest conglomerate, VinGroup, the potential for a lawsuit against the auto-manufacturer, VN Express suggested, had spooked investors in the company’s ecosystem broadly. 

Finally, it was also reported in November that Vietnam had just eight IPOs last year compared to 42 in Thailand and 59 in Indonesia. State media suggested this was because there was a lack of diversity in the stock market which was a turn-off for foreign traders, which in turn meant that it was difficult for local companies to raise capital through IPOs making IPOs a less attractive option for raising capital–a cycle that may be difficult to break.

Although, it’s also worth noting that Thailand and Indonesia are both considered ‘emerging’ markets whereas Vietnam is still considered a ‘frontier’ market by key index analysts FTSE Ruseel and MSCI (See: The Vietnam Stock Exchange: Quick Guide 2023: Market Status). This may, in fact, be the bigger problem, or to look at it another way, resolving this problem may be the solution the local market is looking for.

All of that said, the HoSE finished the month on a high with the VN-Index up nearly 60 points on November 30 compared to November 1. This was, however, after a somewhat choppy month. It’s also worth noting that foreign traders continued to pull funds from the market to the tune of US$158.5 million  (data below).

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VN-Index, historic data, November 2023

Foreign investor trades on HoSE, November 2023