23 Vietnamese tycoons with market capitalization of over 1 billion USD

Including both stock exchanges in 2016, Vietnam had only 1 company with a market capitalization of over 1 billion USD. Now, the entire market has 23 enterprises with a market capitalization of over 1 billion USD.

The above figures were just given by Mr. Tran Van Dung, Chairman of the State Securities Commission, at the Workshop "Capital Market - New Growth Driver of the Economy" organized by SSI Securities Corporation this morning (October 25).

This event is considered a reliable bridge between domestic and foreign financial investors and domestic enterprises, and an effective investment promotion forum in the financial market.

Vietnam stock market booms

“In the past 10 years, the size of the stock market has increased 3 times, in 2006 it was 22% of GDP, in 2010 it was 44% of GDP and currently it is more than 63% of GDP. If in 2006, including both Stock Exchanges (SEs), there were only 192 listed/registered enterprises and only 1 enterprise with a capitalization value of over 1 billion USD, then up to now, the market has had over 700 listed enterprises, 640 registered enterprises, of which 23 enterprises have a capitalization value of over 1 billion USD" - Mr. Tran Van Dung.

In 2016 and early 2017 alone, many big-name enterprises participated in the stock market such as Sabeco, Vietnam Airlines, Vietjet Air, Novaland, Petrolimex, Vpbank,... and other big names about to be listed such as Vin Retail, Hdbank, Techcombank,...

VN-Index - the index representing Vietnam's stock market grew by more than 16% in 2016. Up to this point in 2017, VN-Index continued to grow by 24.5% while HNX-Index grew by 36%. Stock market liquidity increased by 50% from 3,000 billion VND/session in 2016 to 4,500 billion VND/session in 2017.

In 2016 and early 2017 alone, many big-name enterprises participated in the stock market such as Sabeco, Vietnam Airlines, Vietjet Air, Novaland, Petrolimex, Vpbank, etc.

Besides the stock market, the bond market has also developed rapidly and strongly. If in 2006, the outstanding debt of the bond market only reached 14% of GDP, by now it has reached nearly 40%, mainly the government bond market (nearly 30% of GDP) and the corporate bond market (approximately 6% of GDP).

The liquidity of the government bond market has increased dramatically from over VND324 billion/session in 2009 to nearly VND9,000 billion/session in 2017, an increase of 27 times and double the average trading value of the stock market.

The capitalization of the stock market and bond market has reached over 100% of GDP, compared to the current 130% of GDP of outstanding credit, showing that Vietnam's financial and monetary market is gradually achieving a more balanced and stable structure than before.

Issues of concern

Speaking about investment opportunities in the Vietnamese market at the conference, Mr. Kyle Kelhofer, Country Director of the International Finance Corporation (IFC), assessed that investment opportunities in Vietnam are quite unique compared to other countries, with a population of 95 million people, stability and safety factors. He affirmed that early investment will have the opportunity to gain more profits.

However, the Vietnamese market still faces some challenging factors. The IFC representative pointed out that the first challenge lies in the population as Vietnam's population is aging. This is a challenge but also an opportunity for health services to develop and care for the elderly and retirees. Another challenge is related to declining labor productivity, so it is necessary to increase labor productivity.

More and more new investors are entering the stock market.

Vietnam is also in the process of innovation and reform. The equitization of state-owned enterprises helps the Government to have a source of revenue. However, how this process is made transparent, according to the majority or minority mechanism, and what the roadmap is is still awaited. However, implementing equitization is still better than doing nothing.

Besides, Mr. Dung said: Although there are many reasons to be optimistic about the development of Vietnam's stock market, we always monitor to prevent risks and uncertain factors that can affect the growth rate and investment opportunities.

Perhaps none of us can predict the unusual developments and impacts of the Brexit negotiations, the situation in North Korea, the Middle East, terrorism, immigration crisis... on Vietnam's economic development, especially in the context that Vietnam is still a frontier market.

In addition, bad bank debt cannot be resolved overnight and the risk of high inflation is always lurking. The consequences of low performance of many state-owned economic groups still need time to overcome.

Meanwhile, Mr. Nguyen Duc Chi, Chairman of the SCIC Board of Members, said that businesses need to improve their governance. This is the core issue to create a sustainable and transparent stock market.

Speaking at the workshop, Permanent Deputy Prime Minister Truong Hoa Binh said: The investment environment in Vietnam has improved significantly in recent years and will have a breakthrough development in the coming years.

According to Deputy Prime Minister Truong Hoa Binh, the Vietnamese Government has been attaching importance to developing an effective capital market so that the stock market can truly play a role in mobilizing medium- and long-term capital for the economy.

According to Ho Chi Minh City Law Newspaper