KRX trading system takes first steps

KRX trading system takes first steps

After years of anticipation, Vietnam’s stock market has entered a new era with the rollout of the KRX trading system.

Vietnam’s long-awaited KRX IT system went live at 9am on May 5. The milestone was jointly delivered by the country’s stock exchanges, the Vietnam Securities Depository and Clearing Corporation, and South Korean contractor KRX, marking the culmination of a modernisation effort over a decade in the making.

The new system will provide a faster and smoother experience, Photo: Le Toan

In a statement released later that day, the Ho Chi Minh Stock Exchange (HSX) attributed the system’s seamless and secure launch to the coordinated efforts of all market participants, under the close supervision of the Ministry of Finance, the State Securities Commission, and the Vietnam Stock Exchange.

With a range of integrated features, the KRX system is poised to better serve enterprises and investors, facilitate the introduction of new financial instruments, and accelerate Vietnam’s long-term goal of achieving an upgraded market status.

“As the project’s principal investor, HSX greatly appreciates the active cooperation from all relevant stakeholders, including market participants, listed companies, investors, and the media, which has enabled the successful deployment of the system in this initial stabilisation phase. Continued support will be crucial in the coming period,” the HSX stated.

On its first trading day, both the contractor and operators reported that the KRX system performed reliably, with uninterrupted connectivity and stable operations.

Dinh Quang Hinh, head of the Macroeconomics and Market Strategy Department at VNDirect Securities Corporation, offered an optimistic outlook, saying it opens up fresh expectations for the market while advancing Vietnam’s ambition of attaining emerging market status.

“The system will enable smoother trading experiences. Moreover, the KRX has the technical capacity to support the introduction of new products, particularly in the derivatives segment, where the current product range remains limited,” he told VIR.

However, he advised investors to maintain moderate exposure to equities, focusing on sectors with solid first-quarter results and positive prospects in the second quarter, such as banking, retail, seafood, electricity, and public investment.

“It is important to note that leverage use remains discouraged at this stage, given that market volatility is still high and tariff-related risks have yet to be fully contained,” he added.

Bui The Tan, head of retail at SSI Securities Corporation, also hailed the KRX system as a transformative upgrade for Vietnam’s capital market.

“With the new system, long-anticipated products such as intraday trading, short-selling, securities lending, and options contracts are expected to be rolled out soon,” he said. “At the same time, the implementation of a central counterparty clearing model and non-prefunding trading mechanism is also under consideration, both of which are essential to attracting international capital flows.”

“The launch of the KRX represents a pivotal step in Vietnam’s journey to achieve an upgrade from frontier to emerging market status as per the criteria set by FTSE Russell and MSCI. The system underscores the Vietnamese government’s commitment to building a competitive, modern capital market on par with regional peers in Southeast Asia,” said Tan.

He further highlighted that the system’s smooth debut was thanks to the rigorous preparation. “Trading on the first day proceeded without major technical issues, though some investors may need time to adapt to new trading features,” he remarked.

To facilitate this transition, SSI has enhanced its real-time system monitoring and customer support services to quickly address any technical issues. “We are collecting investor feedback and working closely with the exchanges to refine the trading experience. Overall, the successful go-live of the KRX system marks not only a promising beginning, but also a solid foundation for long-term improvements in Vietnam’s securities market,” he stated.

Nguyen Tien Dung, head of Equity Research at MB Securities, underlined that the KRX system’s marks not just a technological upgrade, but a strategic turning point for Vietnam’s capital market. “With the KRX in operation, the most significant contribution lies in its ability to support a central counterparty clearing model, an essential prerequisite for regulators to roll out long-anticipated features such as shortened settlement cycles, short-selling, and tighter controls over transaction errors, especially for investors using non-prefunding services provided by securities firms,” he explained.

Nguyen The Minh, head of Research and Development for Retail Clients at Yuanta Securities Vietnam, cautioned that the system will require time to stabilise before its full potential can be realised.

“In the short term, market liquidity may not see immediate improvement, as investors need time to familiarise themselves with the new system. However, over the longer term, liquidity could be significantly enhanced,” Minh said.

Minh added that for foreign investors, the implementation of the KRX system is expected to facilitate greater access to Vietnam’s stock market. “Naturally, changes in foreign capital flows are unlikely to occur overnight. While the rollout may not trigger an instant breakthrough, the system will ultimately reinforce market safety and investor confidence,” he explained.

VIR