Derivatives pegged to pull in investors
Derivatives pegged to pull in investors
Exchange-traded funds (ETFs), a form of modern derivatives products, will be used to attract new investment inflow into Viet Nam later this year.
Viet Nam's stock market has operated for more than 13 years with many kinds of stocks and fund certificates. However, market insiders said it was time to introduce new investment tools to lure more capital.
ETFs, an index-tracking collective investment scheme with portfolios including a basket of stocks, would be the first step towards building a derivatives market.
Addressing a conference on new investment opportunities early this week, Nguyen Son, head of the market-development department under the State Securities Commission, said derivative index products were a popular trend around the world. Many nations had developed equity index derivatives as the base for building the derivatives market.
Son said regulators, including the HCM City Stock Exchange, the Ha Noi Stock Exchange and the Viet Nam Securities Depository, were speeding up legal and technical preparations so that the first ETFs could start operations in the second or third quarter of this year.
To provide more investment tools, in addition to VN-Index and HNX-Index, the two bourses have constructed other indexes targeting different segments of the market, including VN30, VNMidcap, VNSmallcap, VN100, VNAllshare, HNX30, HNX-Largecap and HNX-Midcap.
PetroVietnam Securities Inc (PSI) also co-operated with France-based Intelligent Financial Research & Consulting to launch PVN-Index in 2012. This includes a basket of 32 oil and gas stocks, of which, PVN-10 represents the sector's top 10 companies and accounts for more than 14 per cent of total market volume.
According to PSI director Pham Quang Huy, PVN-Index even outperformed VN-Index and HNX-Index last year.
From the beginning of 2013 until February 28, 2014, VN-Index increased 40 per cent and HNX-Index rose 41 per cent. Meanwhile, PVN-Index grew 65.4 per cent and PVN-10 was up nearly 55.8 per cent, suggesting that PVN shares posted higher growth than the overall market, Huy told the Dau Tu Chung Khoan (Securities Investment) newspaper.
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