1. Solving the problem of order congestion on the HOSE, liquidity is released
Despite the Covid-19 pandemic, Vietnam's stock market had robustly grown in terms of points, liquidity, and the number of investors. However, it is also the reason for the prolonged congestion on the HOSE. Order congestion had become a hot keyword on many forums and newspapers from the end of 2020.
In the first half of 2021, although there were many solutions, order congestion continued to happen and tend to worsen. It reached the climax in which the HOSE had to halt trading activities in the afternoon trading session on June 1, 2021. Order congestion not only caused frustration, discomfort, and losses to investors but also great pressure on the management agency, the HOSE, and related units.
According to the plan, after 100 days, on July 5, 2021, the HOSE officially put into operations the solution to troubleshoot the transaction system at the HOSE in collaboration with FPT built on the system software of the HNX. The new trading system, with an order capacity of up to 3-5 million orders per day, operated stably and smoothly, meeting the trading demand of investors, although the market continuously set new peaks.
The new trading system has untied market liquidity, then many new records have been made. On average, the trading value of the whole market in 2021 by December 17, 2021, exceeded VND26.21 trillion per trading session –the highest level in the past 21 years of market operation. Especially, the liquidity on the HOSE approached the threshold of VND45.56 trillion per trading session on December 23, 2021. Not only on the HOSE, market liquidity on the HNX and the UPCoM also made a breakthrough, reaching nearly VND3.13 trillion per session and more than VND1.59 trillion per session, respectively.
2. Stock market capitalization exceeds 120 percent of GDP
The size of the stock market increased sharply, reaching 122.2 percent of GDP on November 12, 2021. According to the project on restructuring the stock market and insurance market in the 2020-2025 period, the Government set a target that the market capitalization of securities would hit 120 percent of GDP by 2025. Thus, with the above market capitalization, the target was achieved four years earlier.
Stock is the investment channel that receives the most attention from investors in relation to the mass investment channels in the economy. Amid the context that interest rates were kept at a low level, and many other investment channels encountered obstacles due to the pandemic, the stock market became more attractive to the cash flow. The stock market, hence, had an impressive growth rate in 2021.
3. A series of measures to rectify the corporate bond market
Although the heat decreased compared to 2020, the corporate bond market has continued to boom in 2021.
According to data from the Ministry of Finance, by November 2021, the volume of corporate bond issuance exceeded VND495 trillion. Of which, that for private placement accounted for 94.5 percent. Banks and real estate enterprises continued to occupy the first and second positions in terms of issuance volume.
However, the heat of the corporate bond market in 2021 lies in the risk and quality improvement warnings coming from state management agencies.
Never before has the State Bank of Vietnam and, especially, the Ministry of Finance continuously given warnings about potential risks of corporate bonds to investors like that. Noticeably, the Prime Minister also issued a written request to relevant ministries and sectors to strengthen management, step up inspections, and handle violations in this market.
Based on the inspection results at nine securities companies and two issuers, the State Securities Commission sanctioned administrative violations against two issuers, namely VsetGroup Corporation Joint Stock Company, Apec Group Joint Stock Company, and Vietnam International Securities Joint Stock Company (VIS).
In addition, in terms of legal policy, the SBV also issued Circular No.16. Meanwhile, the Ministry of Finance has also been urgently developing a draft to issue a Decree to replace Decree No.153 to enhance the quality of the corporate bond market.
4. Newly-opened securities accounts set a record
The year 2021 saw a record increase in the number of securities accounts. By the end of November this year, the total number of securities accounts was 4.08 million, while it was merely 2.77 million accounts at the end of 2020. Thus, in the 11 months of 2021 alone, more than 1.31 million new accounts were opened, of which domestic individual investors opened 1.306 million accounts, 3.3 times higher than in the whole year of 2020. 2021 is a record year for attracting investors to participate in the market.
5. The scale of capital increase of listed companies is at a record high
According to estimated reports, in 2021, 147 listed companies were expected to increase their equity by 3.8 percent, equivalent to VND102.6 trillion through share issuance. If enterprises successfully carried out the issuance plan, 2021 would be a record year for the volume of capital mobilized through the issuance of shares of listed companies. Compared to 2019 and 2020, this figure is 1.4 times and more than five times higher, respectively. This number is impressive because, under the strong impact of the Covid-19 pandemic, the capital mobilization in 2020 declined compared to 2019 but had a strong rebound in 2021.
The robust increase of the stock market from the beginning of the year is an opportunity for many enterprises to mobilize capital to expand production and business activities in the context that the economy is gradually recovering.
6. Successfully rescuing Vietnam Airlines
On July 7, 2021, Vietnam Airlines officially signed credit contracts with three commercial banks, including Southeast Asia Commercial Joint Stock Bank (SeABank), Vietnam Maritime Commercial Joint Stock Bank (MSB), and Saigon-Hanoi Commercial Joint Stock Bank (SHB), with a total amount of VND4 trillion. This amount of money was poured into Vietnam Airlines by September 20, 2021.
Along with that, on September 13, the State Capital Investment Corporation (SCIC) also disbursed nearly VND7 trillion to buy shares at Vietnam Airlines under the right to buy shares of State shareholders according to the resolution of the National Assembly and the Government.
Thus, the rescue package of VND12 trillion that the National Assembly approved in December last year was disbursed by State shareholders. The capital supplement for Vietnam Airlines also ends the largest-ever rescue of a joint-stock company that the State performed as the main shareholder. This support package is expected to help Vietnam Airlines overcome the crisis caused by the Covid-19 pandemic.
7. Record net selling by foreign investors
The stock market sublimated when the cash inflow continuously made new records, thanks to the strong participation of the domestic cash flow. However, 2021 is not a joyful story of foreign capital flows in the market. Foreign investors made a record net selling in many years. According to statistics, by mid-December, foreign investors have net sold nearly VND60 trillion, officially surpassing the US$2.5-billion-dollar mark.
However, the good news is that the net selling of foreign investors was also the general trend of many international stock markets when the pandemic occurred. Vietnam's stock market still managed to maintain an impressive upward momentum because the net selling volume of foreign investors was fully absorbed by domestic ones. In addition, foreign investors' net selling no longer affected investors' sentiment as much as in previous years. Besides, according to the regulatory agency, the net withdrawal of foreign capital is negligible and much lower than in many other emerging and frontier markets. Although foreign investors are net sellers, foreign cash flows remain in Vietnam and look for opportunities.
8. VN-Index set a new record high
This year, Vietnam has suffered severe impacts from the Covid-19 pandemic, causing GDP in the third quarter to post a negative growth of 6.17 percent. However, the stock market got a remarkable growth, marked by surpassing the historic peak of 1,200 points, established during the 20-year history of the Vietnamese stock market with two hits in 2007 and 2018, in April 2021. After the VN-Index hit this record high, the market has continued to sublimate and reached a new peak of around 1,500 points.
Although the market reached new peaks, the valuation level continuously fell because of the outstanding growth in business results of listed companies. The P/E ratio of the market reached 34 times when the VN-Index peaked at 1,200 points in 2007 and 22 times in 2018, but it is just over 17 times when the VN-Index currently hovers around 1,500 points.
9. 25 Years of Traditional Day of the securities industry and the launch of the Vietnam Stock Exchange
On November 28, 2021, Vietnam's securities industry officially celebrated 25 years of development. Vietnam's securities industry and stock market have overcome many difficulties and challenges and achieved many proud results, affirming that the policy of building a stock market is right.
Vietnam has established a stock market institution in the right direction, following the economic development in each period, becoming an important medium and long-term capital mobilization channel for the economy, gradually approaching international standards and the process of international and regional integration. With these achievements, the securities industry has created a solid foundation to bring Vietnam's stock market to a new stage with stronger, better quality, and more sustainable development.
A new milestone of the stock market in 2021 is that the Vietnam Stock Exchange was officially launched on December 11, realizing the Prime Minister's Decision No.37 signed in 2020.
The establishment of the Vietnam Stock Exchange will unify the organizational model, mechanisms, policies, development thinking, and information technology infrastructure to serve the market. Especially, it will contribute to increasing the scale and position of Vietnam's stock market, speeding up the upgrade process, meeting eligibility criteria for integration, and attracting domestic and foreign investment flows better.
10. Legal mark of the market
In early 2021, the amended Law on Securities, the Law on Enterprises, the Law on Investment, and the decrees guiding the law implementation took effect simultaneously, creating a new legal corridor for the operation of the business community and the stock market.
At the implementation level, Circular No.57/2021/TT-BTC of the Ministry of Finance chose July 20, 2021 - the day Vietnam's stock market marks its 21 years of opening - as the date to announce the roadmap to rearrange the Vietnam stock markets.
According to the roadmap, by the end of December 31, 2022, the Hanoi Stock Exchange will unify the organization of a bond and derivatives trading market.
As for the HOSE, by the end of June 30, 2025, it must unify the organization of a trading market for listed shares, fund certificates, covered warrants, and a stock trading market of unlisted organizations.
Another legal mark of 2021 is the announcement of the "List of industries with market access conditions applied to foreign investors" on August 31 by the Ministry of Planning and Investment. Previously, many enterprises and investors were confused because Decree No.31/2021/ND-CP only regulated general industries, such as advertising services, educational services, veterinary services, and family-related services. However, the above list has clearly explained everything so that based on that, enterprises can know to expand the room to which extent.