Top 10 highlights of Vietnam’s stock market landscape in 2024

Foreign investors net sold to the tune of nearly VND90 trillion ($3.53 billion) in 2024, four times the amount seen in 2023. This is one of the highlights of the Vietnamese stock market outlook in 2024.

1. Circular 68 removes key obstacles and brings Vietnam closer to improving its market status

On September 18, 2024, the Ministry of Finance issued Circular 68 that modified and supplemented four previous regulations. A key change was that foreign institutional investors were allowed to place orders for shares without fully funding them upfront (without pre-financing).

The circular also established a clear roadmap for publishing information in English. These changes are crucial to Vietnam’s ambition to upgrade its stock market status from “frontier” to “secondary emerging” according to FTSE Russell.

As of November 2, 2024, Circular 68 has received wide praise, particularly from international organizations and market rating agencies. The smooth implementation of non-prefunding has met the needs of foreign institutional investors, raising hopes of an improvement in market status in 2025, in line with the government’s target.

2. Stock market affected by multiple external factors

In 2024, Vietnam’s VN benchmark index, which represents the Ho Chi Minh Stock Exchange (HoSE), recorded growth of almost 12%, but most of this growth occurred in the first quarter. The market stagnated for the rest of the year, struggling to break above the 1,300 level.

This poor performance contrasted with the country’s impressive macroeconomic growth, with GDP increasing by 7.4% in the third quarter and 6.82% in the first nine months, along with projected growth of 7% for the full year. .

The VN index also did not reflect the strong profit growth of listed companies, whose profits increased by 18.8% in the third quarter and 14% in nine months.

The main cause of this poor market performance was external factors. The strengthening of the US dollar caused the exchange rate to rise, prompting the State Bank of Vietnam to intervene by issuing Treasury bills and selling dollars. Furthermore, the uncertainty following the US presidential election contributed to global market volatility, which negatively affected Vietnam’s stock market.

3. Cyber ​​attacks affect VNDirect Securities and PVOIL

On March 24, Vietnam’s top brokerage firm VNDirect Securities was hit by a cyber attackwhich encrypted their data and caused an outage of their trading system. Although the system was reconnected on April 1, the recovery process was gradual.

Shortly after, PVOIL, a subsidiary of state-owned Petrovietnam, was also the victim of a ransomware attack, disrupting operations such as e-invoicing and its website.

These high-profile cyberattacks served as an urgent reminder for businesses to invest in robust cybersecurity measures, particularly as digitalization becomes central to business operations.

4. Increase in capital raising by securities firms

Continuing the trend from late 2023, 2024 saw a significant wave of capital raising by securities firms. Prominent companies such as Saigon Securities (SSI), Vietcap Securities (VCI), VIX, VNDirect Securities (VND) and LPBank Securities (LPBS) led the way. A total of 22 securities firms issued nearly 2.5 billion shares, raising approximately VND25 trillion ($981 million) to bolster their financial positions.

The wave reflects strategic efforts by securities firms to strengthen their balance sheets in anticipation of new opportunities, particularly with the launch of the new KRX IT system and the potential market upgrade expected in 2025.

5. Notable securities fraud cases in court

In 2024, several notorious securities fraud cases were brought to trial in Vietnam. Among the most notable is the Tan Hoang Minh case, in which Do Anh dungChairman of Tan Hoang Minh Group, was found guilty of orchestrating illegal bond issues that defrauded more than 6,600 investors of more than VND8.6 trillion ($337.5 million).

In the Van Thinh Phat case, Truong My Lanchairwoman of Van Thinh That Group, was found to have embezzled more than VND677 trillion ($26.6 billion) from Saigon Commercial Bank (SCB). He used SCB as a financial tool to raise capital from individuals and organizations, falsifying loan documents and inflating asset values ​​to withdraw funds.

In another case, Trinh Van Quyetformer chairman of FLC Group, was sentenced for stock market manipulation and embezzlement, making illicit profits of around VND4.3 trillion ($168.7 million).

6. Record net sales from foreign investors

The year 2024 witnessed a historic wave of net selling by foreign investors in the Vietnam stock market. By mid-December, its net sales had reached almost VND90 trillion ($3.53 billion), almost four times the level seen in 2023.

This capital outflow was driven by more attractive investment opportunities in other markets, especially in the United States, where the dollar strengthened and protectionist policies boosted the performance of American companies.

While the S&P 500 rose 27% and Bitcoin soared 149%, the VN index only rose 12%. This trend was reflected in other Asian and emerging markets, where capital returned to developed economies.

7. National Assembly approves revised Securities Laww

On November 29, 2024, the National Assembly, the legislative body, approved the Revised Securities Law. The new law aims to improve the transparency and efficiency of the issuance and trading of securities. It also includes regulations to combat fraud and ensure offenders are held accountable.

A key addition was the establishment of a legal framework for the clearing and settlement of securities transactions through a central counterparty clearing house (CCP), which is expected to improve market efficiency.

8. Corporate bond market shows positive recovery

After the turbulence of 2022-2023, Vietnam corporate bond market experienced a strong recovery in 2024, both in volume and quality. As of December 25, the total value of corporate bonds issued had exceeded VND455 trillion ($17.85 billion), an increase of 32% from 2023. Of this, public bond offerings amounted to VND46.4 trillion ($1.82 billion), an increase of more than 30%. year after year.

This recovery was driven by improvements in issuer quality, the emergence of green bonds and a more stable macroeconomic environment. With continued economic growth and the enactment of the new Securities Law, the corporate bond market is expected to continue its positive trend in 2025.

9. The government bond market celebrates 15 years of growth

In 2024, Vietnam’s government bond market celebrated its 15th anniversary. Since its creation in 2009, the market has grown significantly and played a key role in raising funds for the national budget, restructuring public debt and stabilizing the economy.

Over the past 15 years, the market has raised more than VND3.25 trillion ($127.53 billion) for the state budget, averaging about VND220 trillion a year, five times more than in the period 2000-2008.

Outstanding public debt reached more than VND2.35 trillion ($92.2 billion) by the end of 2024, representing 23% of GDP and an 18-fold increase from 2009. The secondary market has also seen a notable increase. of liquidity, which now averages 11 VND. .2 trillion (US$439.5 million) per session, compared to VND365 billion per session in 2009.

10. Record number of listings

In 2024, Vietnam’s stock market saw a record number of listings, with only 10 companies listed. These included two companies transferring from the Unlisted Public Company Market (UPCoM) to the Hanoi Stock Exchange (PTX from Petrolimex Nghe Tinh Transportation and Service JSC and CAR from Tri Viet Education Group) and eight new listings on the Hanoi Stock Exchange. Ho Chi Minh Securities (RYG). of Royal Invest, DSE of DNSE Securities, MCM of Seed Moc Chau Dairy Cattle Corporation, HNA of Hua Na Hydropower, QNP of Quy Nhon Port, TCI of Thanh Cong Securities, NAB of Nam A Bank and VTP of Viettel Post).

With more than 900,000 companies operating in Vietnam, this number of listings is remarkably small. The low level of new listings highlights a missed opportunity for companies to tap the stock market to raise capital and promote their brands.

The limited diversity of listed companies also reduces the market’s attractiveness for new investments and undermines its competitiveness, especially when investor preferences shift between different asset classes.