Chairman's Insights

The emerging derivatives market

Starting August 2017 Vietnam will have a derivatives market with four kinds of products: Futures; Options; Swaps; and Forwards and they can be traded both on the OTC or the main exchange. However according to the State Securities Commission there is a move to merge the two exchanges[1].  Originally, it was anticipated that this new market would commence trading in May or June 2017.

According to Saigon Securities on of the main brokerage firms in Vietnam the first derivative product to be traded will be futures contracts for the VN 30 Index (a sub-index of the HCMC stock exchange capturing the performance of the top 30 companies by market cap.) The introduction of covered warrants is also expected to be introduced later in the year,

The introduction of derivatives is expected to draw more local and foreign capital into the market and also increase liquidity,

The Vietnam stock market has performed strongly in the first half of 2017, The VN index increased 16.8% to 774 points, in the first 6 months of the year and the HXN Index 23% to 99 points[2].

Trading by foreign investors has also grown during the first 6 months of the year with investments of over 9 trillion VND[3].

It is widely expected that the Government’s economic measures to help shore up investor confidence such as increasing the foreign ownership cap, equitisation of State Owned Enterprises and bank restructuring would continue to drive an upward trend in the Vietnam Index.

 


[1] Dr. Vu Bang former SSC Chairman March 2017.

[2] Vietnam News July 10th 2017

[3] Exchange rate to US$ approx. 22700

Executive Chairman
Kenneth Atkinson View more