Việt Nam’s stock market in 2024: Milestones, reforms and resilience in a transformative year
Việt Nam’s stock market in 2024: Milestones, reforms and resilience in a transformative year
In 2024, the Vietnamese stock market's benchmark VN-Index recorded a nearly 12 per cent growth, with a significant portion of this increase realised in the first quarter. — VNS Photo Mai Hương |
The year 2024 has been a pivotal one for Việt Nam's stock market, marked by significant legislative changes, technological advancements and dynamic shifts in investor behaviour. Below, Việt Nam News listed ten key events that have shaped the market this year.
1. Revised securities law passed
On November 29, Việt Nam's National Assembly officially passed amendments to the Securities Law.
This landmark legislation enhances market transparency and strengthens oversight against fraud, setting the stage for Việt Nam’s stock market to achieve an upgrade in classification.
The changes aim to resolve practical challenges and boost investor confidence.
2. Adoption of non-prefunding regulations
The implementation of Circular 68/2024/TT-BTC on November 2 allows foreign institutional investors to purchase shares without upfront payment in specific cases.
This critical step brings Việt Nam closer to being reclassified as an emerging market, raising optimism for 2025.
3. Progress on MSCI reclassification
In June, MSCI upgraded Việt Nam's 'transferability' criterion, meeting 10 out of 18 criteria required for an upgrade from a frontier to an emerging market. This improvement is attributed to increased off-exchange trading and transactions without prior regulatory approval.
While the country meets 10 out of 18 MSCI criteria, efforts are focused on enhancing the remaining eight, such as foreign ownership limits and market regulations.
The introduction of Circular 68 is viewed as a positive step in shaping future assessments by MSCI and FTSE Russell, indicating potential advancements in Việt Nam's market evaluation.
4. Tech stocks soar amid global tides
Technology stocks surged from the year's start to end, driven by positive industry news. Despite modest market share, many tech stocks soared, with some, like FPT, achieving record-breaking performances.
FPT Corporation rose 81 per cent, consistently breaking records. Viettel Global Investment JSC peaked at VNĐ156,000 per share (US$6.12), while Viettel Construction also climbed 40 per cent, briefly exceeding VNĐ100,000 a share mid-year.
This sector’s boom was fuelled by groundbreaking partnerships, including a $200 million AI collaboration between Nvidia and FPT, cementing Việt Nam’s place in the global technology map.
5. Foreign investor sell-off hits record high
In 11 months of the year, foreign investors recorded a net sell-off of approximately VNĐ88 trillion on the Hồ Chí Minh Stock Exchange (HoSE), the highest in 24 years.
January stood out as the sole month with a pause in foreign net withdrawals. However, in May and June, foreign investors withdrew over VNĐ14 trillion each month on the southern bourse. This significant foreign selling trend is primarily linked to exchange rate fluctuations experienced throughout the year.
While this impacted market liquidity, it highlights the challenges posed by exchange rate pressures and external economic factors.
6. Cyberattack disrupts VNDirect, PVOIL
In March, VNDirect, a leading securities company, suffered a cyberattack, causing a week-long disruption. Although reconnection was established by April 1, the system's full recovery had to proceed meticulously according to a predefined roadmap.
Shortly after, on April 2, PVOIL encountered a similar attack, impacting various operational facets such as the electronic invoice issuance system, website and other applications.
The incidents served as a wake-up call for the market's cybersecurity framework, prompting immediate reforms and investor support measures.
7. Investor accounts surpass nine million
Việt Nam exceeded its target of nine million investor accounts a year ahead of schedule, reaching a milestone that represents 9 per cent of the population. This growth signifies rising public interest in equity investments, setting the stage for future expansion.
8. High-profile securities scandals
Major legal cases involving prominent firms like Tân Hoàng Minh and FLC revealed deep-rooted issues in corporate governance.
In the Tân Hoàng Minh case, Đỗ Anh Dũng, Chairman of Tân Hoàng Minh Group, arranged the issuance of bonds, misappropriating over VNĐ8.6 trillion from 6,600 investors.
Trương Mỹ Lan, Chairwoman of Vạn Thịnh Phát Group, embezzled over VNĐ677 trillion from Saigon Commercial Joint Stock Bank. She manipulated SCB for financial gain, using deceptive tactics to withdraw funds.
Meanwhile, Trịnh Văn Quyết, former Chairman of FLC Group, committed fraud, embezzlement and market manipulation, illicitly profiting about VNĐ4.3 trillion.
These trials exposed significant misconduct, leading to calls for stricter regulatory measures.
9. Corporate bond market rebounds
The corporate bond market staged a comeback, with issuances totalling over VNĐ455 trillion by December 25, a 32 per cent year-over-year increase. Notably, the total value of bonds issued to the public reached VNĐ46.4 trillion, showcasing a robust increase of over 30 per cent over last year.
New regulations aimed at transparency and quality improvement have restored investor confidence in this crucial financing channel.
10. Slow listing of new companies
Despite a robust economy, only ten companies debuted on Việt Nam’s stock exchanges in 2024. Particularly, two companies moved their stocks from UPCoM to the Hà Nội Stock Exchange, while eight companies were newly listed on the HoSE.
This figure underscores the underuse of public listings as a capital-raising mechanism, revealing potential for growth in this area.
