Create all conditions for the stock market to operate smoothly and stably

VN-Index has found the green color again

VN-Index last week found the green color again. Illustration.

Since April 4, when VN-Index started to fall from the peak of 1,535, the main index has decreased continuously for 6 weeks. However, the downtrend has been braked since the beginning of this week, after touching the 1,160 point area, the VN-Index had the strongest increase since 2020 and then gradually recovered to 1,240 points at the end of the week.

Last week was also a week with a lot of information related to stock market from market stabilization solutions to changes in management personnel.

During the review and consolidation of the Chairman’s personnel State Securities Committee (SSC), the Ministry of Finance has assigned Mr. Nguyen Duc Chi – Deputy Minister of Finance to be directly in charge of, directing and administering the SSC since May 19. Leaders of the Ministry of Finance said that the Ministry has prepared plans, including personnel work, to strengthen the Securities Commission, the Stock Exchange and the Securities Depository Center in all situations. situations, in all different scenarios.

“The view of the Ministry of Finance is to fully absorb and strictly implement the conclusions of the inspection agency. In terms of mechanisms and policies, the Ministry of Finance has proactive plans to coordinate with relevant agencies in regulating amending and supplementing the provisions of the law on the securities market; having a plan to strengthen the comprehensive capacity of the market management agency; assigning officers with professional competence and moral qualities to the positions of competent authority. key position.

Regarding the improvement of technology infrastructure, we expect that no later than this year we will put the new technology system into operation, speeding up the progress so that the market gets closer to the possibility of upgrading,” said Mr. Nguyen. Duc Chi – Deputy Minister of Finance said.

Upgrading Vietnam’s stock market must wait for new technology infrastructure

The bidding package “Design, solutions, supply, installation and transfer of information technology systems” called KRX for short, worth more than 600 billion VND, was signed by the Ho Chi Minh Stock Exchange (HOSE) with the Ho Chi Minh Stock Exchange (HOSE). Korea Stock Exchange (KRX) since 2012 (5 year term to be completed). This is a project invested by HOSE, including functional systems for the operation of HOSE, HNX and Vietnam Securities Depository (VSD).

The bidding package is expected to be able to process millions of orders/session when it comes into operation (compared to less than 1 million orders/session of the current system), as well as the capacity to help Vietnam’s stock market be upgrade from marginal to emerging – something market players have long wanted.

The market size of Vietnam has become too large to stay in the marginal market group. Currently, Vietnam’s equity market is weighted over 30% in the MSCI Global Marginal Market Index. This is the largest weight, while Morocco is followed by only 10%. Many experts consider Vietnam like a “middleweight boxer” but still competing in the lightweight group.

The KRX bidding package comes into operation, allowing the Vietnamese market to meet the clearing capacity (CCP), thereby also allowing the implementation of T+0 (intraday stock trading) instead of T+ 3 (buying and selling stocks after 3 days to return to the account).

It is estimated that in the stock market, upgrading to an emerging market can bring an additional 10 billion USD of new indirect investment to Vietnam, of which the first year alone can receive an additional 2-5 billion USD. According to the representative of the World Bank, to achieve such promising results, Vietnam needs to have a solid foundation for the market to operate effectively.

Solutions to stabilize the stock market

There is a lot of value for Vietnam as the stock market is upgraded from marginal to emerging. With the commitments from the leaders of the Ministry of Finance and the current fierce spirit, the new infrastructure system will soon come into operation. To upgrade the Vietnamese market, a series of other solutions to build the foundation are also being implemented.

What impressed market participants with the Government’s recent stock market stabilization activity was the fierceness and speed. Just last week, there was a decision to request the re-disclosure of information on proprietary trading, on the afternoon of May 20, HOSE announced the information again, HNX made sure before May 23.

In addition, solutions such as: Listed companies must explain the reason why stocks went to the ceiling and fell to the floor for 5-10 consecutive sessions; Changing the way the final settlement price is calculated on the expiration date of the VN30 index futures contract, which is considered practical, solves many bottlenecks that contribute to the sustainability of Vietnam’s securities.

The change most welcomed by investors is that instead of using the closing price of ATC as the settlement price for VN30 index futures, the current price will be the average price of the last 30 minutes in the expiration session. prevent suspicion of “interference” of large organizations.

Regarding proprietary trading, the State Securities Commission affirmed that the proprietary trading of securities companies is in line with international practices, and the inspection shows that securities companies separate proprietary trading activities and investment recommendations. , there is no phenomenon of securities trading in front of individual investor accounts.

In addition, the odd lot trading under 100 is also being tested by HOSE with securities companies, if feasible, it will be applied again from the beginning of June.

There is a lot of value for Vietnam as the stock market is upgraded from marginal to emerging. Illustration.

Responding to the fluctuations in the stock market over the past time, according to a representative of the market management agency, the world stock markets had a sharp decline due to the move to tighten monetary policy and increase interest rates. to curb inflation. Although Vietnam has a more stable macro foundation, the stock market is also partly affected by the “headwind” from the world.

However, fluctuations also open up opportunities to receive long-term investment cash flow, which can be most clearly observed through transactions of foreign investors, in the context that all investment components are net sellers, in April. , foreign investors are net buyers. Although the general market dropped sharply in April, foreign investors net bought over 3,500 billion dong on HOSE, becoming a bright spot of the market.

Looking at the short term, Bluechips VN30 also dropped a few tens of % in the last drop, but looking at the historical length, overcoming similar fluctuations, HPG (Hoa Phat) has increased about 10 times since going public, MBB increased nearly 8 times, REE increased nearly 30 times or MWG increased about 15 times

According to experts, this is probably the time when we should not care much about VN-Index anymore because the indexes are subject to strong fluctuations. However, when the easy cash flow passes, this is the period of investment spirit to find good businesses with attractive discount prices. Vietnam is still a growth economy, there are many potential businesses, many entrepreneurs say they can do it.

The stock market is a market of expectations and with many things that can still be expected in the long run, good stocks, not yet sold, are not afraid of losses.

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