On 5/10/2018, Securities Investment Review had an interview with Dr. Nguyen Son- Chairman of the Board of Directors of Vietnam Securities Depository (VSD), titled "Vietnam securities market still has plenty of room for foreign investors", which made judgement of foreign capital attraction trend of the securities market as well as the role of VSD in attracting foreign capital flows and upgrading the market.
Update: Tuesday, 09/10/2018
According to Dr. Nguyen Son, in 2018, despite the multi-dimensional impact, Vietnam securities market is still one of the markets in the region to be attractive to foreign investors. By the end of August 2018, there were 2.1 million accounts of investors opened at VSD, including 27,146 accounts of foreign investors. In the first eight months of this year, the number of foreign investors opening new accounts at VSD reached 4,745, an increase of 40.1% compared to 2017. Along with the increase in the number of accounts, trading value of foreign investors also tends to increase. According to the statistics of the State Securities Commission, compared to the same period in 2017, the total buying value of foreign investors in the first eight months of the year reached 207,775 billlion VND, increasing 47%, the total sales value of foreigners reached 187,717 billion VND, up 75.4%. In view of Dr. Nguyen Son, Vietnam Securities market is still a place for foreign investors to participate as the market is developing in the direction of being increasingly transparent, sustainable and gradually approaching international practices and especially high growth continuity of Vietnam economy (GDP growth in the first nine months was 6.98% - the highest increase of 9 months in 2011-2018). VSD is the sole infrastructure to provide post-trade services and support the trading of Vietnam securities market. In recent years, VSD has been actively adjusting, changing towards completing members’ systems, developing online trading code registration system, improving settlement system for securities transactions (shortening settlement cycle of shares, fund cerfiticates from T+4 in the beginning period of market openning in 2000 to T+2; payment of government bond transactions via the State Bank of Vietnam; clearing and settlement of derivatives under CCP model, etc), diversifying value-added products/services to the market such as e-voting, transfer agent services for open-ended fund and ETF, applying ISO15022 message on the ISO-message based gateway with members, etc. for the purpose of facilitating and attracting investors and especially foreign investors to Vietnam securities market.
To contribute to the upgrade of Vietnam securities market, Dr. Nguyen Son said in recent years, upgrading the Vietnam stock market from the frontier market to emerging market on the Morgan Stanley Capital International (MSCI) chart is considered one of the the key objectives and tasks set for SSC. Adhering to the above objectives and solutions, VSD has made positive adjustments in terms of system, business process, information disclosure in English, etc. towards maximum support for investors, especially foreign investors to conveniently participate in Vietnam securities market. According to the publication of MSCI ranking results at the end of June 2018, foreign investors have assessed the registration of securities trading codes, account opening, depository, registration and trading to be more favorable than before and they have no obstacle when carrying out these operations. This is considered as a result of VSD's efforts to support the upgrading of Vietnam securities market. In the coming period, to support the upgrading of the market, in legal aspect, VSD will continue to contribute to the development of the revised Law on Securities and its guiding documents in order to remove obstacles related to post-trade and support transactions of domestic and foreign investors. In terms of system and operation, VSD will continue to upgrade and develop the IT system, shorten the business process to best support the process of registration, depository, clearing and settlement of investors, especially foreign investors. For underlying securities market, VSD is expected to provide services for covered warrants in accordance with the roadmap of regulators, put the management system of transfer agent services, fund administration for open-ended fund and voluntary retirement funds into operation. As for the derivative market, VSD will carry out clearing and settlement for Government bond futures and new index futures at the requirement and the roadmap of regulators to diversify products on the derivatives market. In addition, VSD is cooperating with relevant organizations to study intraday trading and settlement of to-be-receivable securities. The implementation of these trading mechanisms will contribute to increase liquidity, meeting the expectations of investors as well as complying with international practices.