Marketing plan for the development of ho chi minh city stock exchange in the period of 2012 2017 in vietnam stock market

MOF: Ministry of Finance VSD: Vietnam Securities Depository HNX: Hanoi Stock Exchange IPO: Initial Public Offer OTC: Over the counter WTO: The World Trade Organization IT: Information Te

MBMM5

ĐẶNG KIM THỦY

MARKETING PLAN FOR THE DEVELOPMENT OF HOCHIMINH

STOCK EXCHANGE IN THE PERIOD OF 2012 - 2017

IN VIETNAM STOCK MARKET

MASTER PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT

Tutor’s Name: TRAN HA MINH QUAN PhD

Ho Chi Minh City

(2012)

my knowledge and belief, the project contains no materials previously published or written

by another person except where due reference is made in the project itself

Dang Kim Thuy

February 19, 2012

for all support in giving the valued guidance and useful advises in the preparation of this project

In addition, I would like to say thanks to Prof Jean-Pierre Baeyens – the Dean of Solvay Business School in Vietnam for kind supports in MBMM5 Course as well as my final project

Special thanks to Mr Trinh Trung Nghia – Manager of Trading Surveillance Department

of Hochiminh Stock Exchange, my mentor, for unlimited support in sharing information and experiences in my project

Finally, I would like to send my science appreciation to my family and my company for supports and encouragements during my MBMM5 course

“MARKETING PLAN FOR THE DEVELOPMENT OF HOCHIMINH STOCK EXCHANGE IN THE PERIOD OF 2012 - 2017 IN VIETNAM STOCK MARKET” Prepared by Ms Dang Kim Thuy

This project has satisfied the requirement for Master in Business and Marketing Management course

I, therefore, recommend that the project be presented

Tutor

TRAN HA MINH QUAN

Trinh Trung Nghia

Manager of Trading Surveillance Department

II VIETNAM STOCK MARKET OVERVIEW 5  

2.1 Vietnam stock market 5 

2.2 Hochiminh Stock Exchange (HOSE) 6 

III THE DEVELOPMENT STRATEGIES OF HOCHIMINH STOCK EXCHANGE 7   3.1 Business Objectives 8 

3.2 Business Strategies 8 

IV MARKETING OBJECTIVES 9 

V MARKET RESEARCH ANALYSIS 9  

5.1 Reasons to Research 9 

5.2 Purpose of Research 10 

5.3 Research Methodology 11 

VI RESEARCH DESIGN 11  

6.1 Framework of Research 11 

6.2 Methodology 11 

6.3 Information Need 12 

VII RESULT OF RESEARCH 13 

VIII TARGET SEGMENT 16 

8.1 Vietnamese enterprises 16 

8.2 Listed companies 17 

8.3 Investors 18 

8.4 Partners 19 

IX MARKETING ACTIVITIES PLAN 20 

9.1 Products and services 20 

9.1.1 Products: 21 

9.1.2 Services: 21 

9.2 Price 22 

9.3 Place (distribution channel) 22 

9.4 Promotion 23 

9.5 Communication 23 

9.6 Estimate Budget 26 

X CONCLUSION AND RECOMMENDATION 29  

XI REFERENCE 30  

XII APPENDIX 32  

Appendix 1: Conception 32 

Appendix 2: Explaination of each activity 33 

Appendix 3: Macro and Micro Environment of Hochiminh Stock Exchange 35 

Appendix 4: Questionnaire survey 50 

MOF: Ministry of Finance

VSD: Vietnam Securities Depository

HNX: Hanoi Stock Exchange

IPO: Initial Public Offer

OTC: Over the counter

WTO: The World Trade Organization

IT: Information Technology

WFE: The World Federation of Exchange

AOSEF: Asian and Oceanian Stock Exchange of Federation ASEAN CEO meeting: CEOs ASEAN Stock Exchange Meeting KRX: Korea Exchange

TSE: Tokyo Stock Exchange

MP: Market Order

ETFs: Exchange Trade Funds

REIT: Real estate investment trust

MOU: The Memorandum of Understanding

EXECUTIVE SUMMARY

Vietnam stock market is one of the potential markets with growing and receiving great attention from investors to the government because it has an important role in raising capital Besides, it also provides an environment for public investment and helps the government implement macroeconomic policy As a "thermometer" of the economy, stock market has shown a positive trend Based on the VN-Index, the stock market seemed not

to be bright in the region but it has left a strong impression in terms of capital channel of financial market

Hochiminh Stock Exchange

(HOSE) has seen vigorously moving

from state-owned company to a limited

company with full functionality as an

Exchange under the international rules

This is a major turning-point in the

operation of HOSE; create a stepping

to improve its position in the process of

integration with the international stock

market However, these reforms have been implemented by HOSE still to do and not enough powerful yet to push HOSE up to enter into the world

Year 2011 was a difficult year for Vietnam stock market in particular and the world

in general The global crisis and the increase of inflation of Vietnam have caused many uncertainties lead to influence market participants The VN Index lost 26.5%, average trading down nearly 28.3% in volume and 55.3% in value compared with year 2010 Poor market liquidity has caused leading to decline the revenue of securities companies, the number of securities companies lost nearly 80% of total number of securities on the market In addition, HOSE is gearing up to adjust the current transaction time in transaction management project This project is extending trading time into afternoon,

Source from HOSE: VN Index 2011

deploying to open market order (MP) after approval from the State Securities Commission,

to continue to participate in building the new HOSE-Index

Built on the development of HOSE to fit the real conditions and orientation of the government in the stock market, the strategy revolves around problems and the operation

in the stock market such as the goods-services, technology infrastructure, the needs of the market participants, competitiveness and international integration in the period from 2012

- 2017 The year 2012 is the next stage for Vietnam economy in 2011-2020 with the objective of sustainable development proposed in The 11th Vietnam Communist Party Congress It is likely that challenges will remain for stock market However, HOSE with the endeavor and the solidarity of all staff will surely overcome challenges to make stock market fair, reliable and transparent, performing its crucial role in the national economy

In the coming stage with many challenges and opportunities, with a determination to grow sustainably based on international standards and practices, HOSE had the development strategies in period 2011-2020 and submitted to State Securities Commission HOSE will continue its strategic goals to modernize the infrastructure and technology as well as diversify products and services for the market The overall strategy is the basis for HOSE’s department to build a marketing strategy to match the orientation development and it is also the basis of implementation evaluation results in every phases

Since then, build a marketing strategy for promoting HOSE’s development and increase more powerful into Vietnam stock market as well as the world stock market HOSE will continue its role in organizing the bourse safely, publicly, fairly and transparently, and being an effective fund mobilizing channel for the country’s economy to attract local and institution investors

I LITERATURE REVIEW

There are many definitions of Marketing as The Chartered Institute of Marketing

defines marketing is “The management process responsible for identifying, anticipating and satisfying customer requirements profitably” Or, Philip Kotler defines marketing as

“satisfying needs and wants through an exchange process” P.Tailor of the website of

learnmarketing suggests that “Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer”(What is Marketing?) In summary, Marketing is seen as task of creating,

promoting and delivering products and services with the best benefit to customers and business To satisfy customers, they must make marketing plan following the business objectives and strategies Marketing plan outlines the specific actions the company intends

to attract potential customers in order to persuade customers to use products and services the company offer Before to make marketing plan, the company always must need to have market research for collecting and analyzing of information about customers or competitors or the effectiveness of marketing programs so that the company can define what the customers want and need There are two types of market research as:

 Primary research (also known as field research such as experts and actors, observation, market tests, market survey), which relate to research for a specific purpose In marketing, the term “primary research” has types of primary data collection methods including in-depth interview and discussion focus groups

 Secondary research (also referred to as desk research such as government, trade associations, press, annual reports, private surveys), initially conducted for one purpose, but often used to support another purpose or end goal

The appropriateness of each research depends on whether data can be quantified (quantitative research), or whether subjective, non-numeric or abstract concepts are required to be researched (qualitative research) (Marketing, Wekipedia)

After market research analysis, the company will start marketing activities plan through marketing mix- is a business tool used in marketing products including 4Ps such as products/services, price, place (distribution) and promotion

- Products: is often used as a good or service that most closely meets the requirements of particular market or segment

- Price: In general terms, price is the quantity of payment between two parties and refers given by one party (buyers) to another (sellers) in return for goods or services

- Place (Distribution Channel): in the stock market, the term “distribution channel” is the path movement of products and services from the businesses to customers

- Promotion: in marketing, the term “promotion” is as form of communication that the company uses various multimedia methods to focus on a targeted segment in order to reach specific marketing objectives

The project will build the detailed 5 years marketing plan for the development of HOSE in Vietnam Stock Market HOSE is an agency of the central securities market in Vietnam So HOSE has no competition not like as other businesses However, in order to

be able to stand firm in the management of listed companies and securities companies in the stock market, HOSE must endeavor to promote participants market more for raising the capital and the liquidity as well as particularly attracting investors and foreign institutions participate in the market HOSE had the development strategies of stock market from 2011 – 2020 after presented to the State Securities Commission (SSC)

Vietnam stock market is still young so it somewhat difficult and was affected by the global financial markets In addition, information disclosure appeared the listed companies and securities companies give inaccurate information to make the loss of investor’s belief and lead to investors no longer spend the money invested They moved to invest gold, deposit with high interest rates and led to the VN index of Vietnam stock market slumped sharply Therefore, this project will analyze the understanding of market and the desired

requirements of individual investors, securities companies as well as experts in the field of financial securities to gather information how investors expect Vietnam stock market or why investors do not hope to participate in Vietnam stock market This analysis is based

on market research following in-depth personal interview method to get the quality for the thesis After analysis, the project will give market objectives and market strategy plan for marketing as well as communication of HOSE in the period 2012 - 2017

II VIETNAM STOCK MARKET OVERVIEW

2.1 Vietnam stock market

In Vietnam, there are two stock exchange (Hochiminh Stock Exchange and Hanoi Stock Exchange) and Vietnam Securities Depository (VSD) They are directly under by Ministry of Finance and they are also supposed to report State Securities Commission (SSC) such as trading surveillance, information dissemination and so on Hanoi Stock Exchange (HNX) manages bonds and OTC HNX also manages listed companies with paid-up capital 10 billion VND Hochiminh Stock Exchange (HOSE) operates securities trading and manages blue chip with paid-up capital over 80 billion VND and fund certificates The Vietnam Securities Depository Center (VSD) following missions: supporting works after trading such as depository, registration and clearing and settlement

of securities in running the entire system; helping authorities in doing market surveillance more effectively and controlling capital flow

Vietnam Stock Market fluctuated dramatically in 2011 due to harsh influence from both domestic and overseas economics In the last days of 2011, the stock market went down steadily with HNX-Index at 56 points (on 27 December 2011) and decreased 50% compare with the peak of points in the year VN-Index recorded the low at the 347.80 points (on 27 December 2011) and decreased 34% from the peak of points in the year About the scale of market transactions in the year, the total volume of securities traded

on the Hochiminh Stock Exchange (HOSE) reached 8,303 million shares units, worth VND 160,395 billion and in Hanoi Stock Exchange (HNX) were 7,944 million shares units, worth VND 95,847 billion respectively (Linh Chi, 2011)

2.2 Hochiminh Stock Exchange (HOSE)

On July 10th 1998, the Prime Minister signed Decree No 48/1998/ND-CP on stock and securities market and a Decision to set up two (02) securities trading centers at Hanoi and

Ho Chi Minh City Hochiminh Stock Exchange was formerly called Ho Chi Minh City Securities Trading Center and is the first central stock market of Vietnam On July 20th

2000, the Ho Chi Minh City Securities Trading Center was officially put into operation and executed the first trading session on July 28th 2000 with 2 types of listing stocks After 7 years of growing and integrating into the global securities market, the government signed Decision No 599/QD-TTg on May 11th 2007 to transfer the Ho Chi Minh City Securities Trading Center to Hochiminh Stock Exchange (HOSE) On August 8th 2007, Hochiminh Stock Exchange was officially opened and run as a limited company with 100% state owned capital by Ministry of Finance

Hochiminh Stock Exchange has always been the pioneer in the field of organizing transactions, listing management, information disclosure, trading surveillance, particularly investment in technological infrastructure development and research and development of new products Over 11 years of operation, HOSE has built a solid foundation for development HOSE is an equity market of large companies with the size and trading

volume steadily increased over the years As of 31 December 2011, there were 301 stocks,

5 funds certificates, and 47 bonds listed and traded on HOSE with the total nominal listing value of VND 203,066 billion, increasing 18.2% compared to year 2010 The listed companies decrease the revenue and profit steadily due to difficulties to find the capital and exchange rate fluctuation HOSE currently has 102 member firms and more than 1.200.000 investor accounts in domestic and foreign Auction activities is quite with 05 auctions were hold successfully in 2011 The total value of the auction revenue is VND

448 billion, down 58% over the same period in 2010 (Report 2011 of HOSE)

The brand name and position of HOSE increasingly confirmed in the process of integration with the region and the world through cooperation and sign several MOU with stock exchanges for the fields of technical support, training, information exchange and cross-listed The brand name and position of HOSE increasingly confirmed in the process

of integration with the region and the world through cooperation and sign several MOU with stock exchanges for the fields of technical support, training, information exchange and cross-listed Especially joined ASEAN Linkage with 6 ASEAN Stock Exchanges in the region, joined the Asian and Oceania Stock Exchange Federation (AOSEF) and the World Federation of Exchange (WFE) marks the full integration of the HOSE on global financial markets

III THE DEVELOPMENT STRATEGIES OF HOCHIMINH STOCK EXCHANGE

Stock market is a long-term capital market and HOSE always plays an important role in the economy because it is a channel to raise capital efficiently in business activities and provide the stability and development to economy Therefore, in the strategy of socio-economic development of the country in 2001-2010 and the project for development of Vietnam capital market up in 2010 and vision in 2020, the Government has been particularly concerned to stock market

Compared to the other organization unit in the country, HOSE has no competitive pressure in the business activities environment However, HOSE does not only stop the centralized management of listed companies and securities firms in the market but also want to create a brand name in the region as well as in the world and attract investors, institutes participate in Vietnam's stock market to raise capital as well as the liquidity of the market Thus, HOSE had plans and objectives to develop the strategies for Vietnam stock market from 2011 – 2020 as follows:

3.1 Business Objectives

 With the leader position in the securities industry, HOSE has ambitions to become a strong and sustainable organization based on international standards and organize the stock market transparency, safety and efficiency

 Affirming the level brand in the region and international and diversify the high quality

of products and services

 Improving modern technology infrastructure and meet international standards in the transaction, listing, supervision, information disclosure and other activities

 "To accomplish the goal, HOSE needs support from many sides including in particular the consensus of market participants"

3.2 Business Strategies

Period of 2011 - 2015

– Increase the number of listed companies reached about 400-500 companies and market capitalization value stocks reach 60-70% of GDP

– Improve the organizational structure and establish corporate governance system

according to the international standard

– Improve modern IT infrastructure, automation trading, trading surveillance,

information dissemination systems

– Improve the quality of human resources on par with the ASEAN Stock Exchange

Period of 2016 - 2020

– Increase the number of listed companies reached about 600-700 companies and market capitalization value stocks reach 80-90% of GDP

– Connect trading entirely with the ASEAN Linkage which allows domestic and foreign

investors to make cross-border transactions

– Enhance the quality of products and services and continue to diversify new products for the current segment

– Conduct to equitize HOSE and establish many companies joint venture in order to

provide services to the stock market

IV MARKETING OBJECTIVES

 Increasing local and foreign investors’ awareness in the Vietnam stock market

 Attract new businesses equitize and list on HOSE to raise the capital

 Launch new products: ETFs, derivatives in next 5 years

V MARKET RESEARCH ANALYSIS

5.1 Reasons to Research

The year’s market performance shows that the attraction generated by increasing listed securities has no longer been a great contribution to improving the market liquidity Also, the attraction that the market benefited from the economic growth was overwhelmed by specific obstacles faced by the economy, e.g inflation and monetary policies The fact that what used to be the attractive characteristics of the market are now fading, has presented a new challenge for maintaining the market appeal In order to develop further and enhance international competitiveness, the market needs new impulses: market structure needs to

be revised; trading barriers need to be removed; and advanced services and practices need

to be launched, etc Especially, HOSE had the development strategies from the period

2011-2020 and from that the project bases on the development strategies to make marketing plan for the development of HOSE Building a marketing strategy plan for HOSE helps HOSE to create a good image and sound position in Vietnam and ASEAN

region And attract market participants come back the Vietnam stock market

5.2 Purpose of Research

To building a marketing plan for HOSE, the project will collect and analyze as below:

Investors:

 To know the level of investment and aware of Vietnam stock market

 To get investor’s opinions if the Vietnam stock market go down in the future

 The ways which investors want HOSE will change strategies near future

 To get recommendation for investors’ opinion

 How investors expect Vietnam stock market

Securities companies (brokers or analyst experts)

 To get opinion of experts about the Vietnam stock market

 The key drivers to influence the Vietnam stock market

 The key drivers will push Vietnam stock market upwards

 To get recommendation from broker’s opinion

 Should or should not deploy new products/services for Vietnam stock market

 Assess IT’s system, transaction system in stock market (should or should not to invest new solution package for IT system in the future)

Other sectors relate to stock market:

 Elements of successful stock market

 The benefits of stock market

 The role of Hochiminh Stock Exchange

 Reasons why Vietnam stock market went down

 How they want to expect HOSE in the future

VI RESEARCH DESIGN

6.1 Framework of Research

Step 1: Problem Statement

Step 2: Research Questions

Step 3: Methodology including Qualitative Research

Step 4: Data Collection

- Group 01 – Investor: 2 persons

- Group 02 – Securities companies: 2 representative persons of Vietnam’ securities companies and 1 foreign securities companies

- Group 03 – foreign stock exchange: 1 representative persons of Tokyo Stock Exchange

- Group 04 – Bank: 1 representative person of Japan Bank For International Cooperation

- Group 05 - Securities and Futures Institute (SFI) of Taiwan (Education Center)

- Group 06 - Interactive Data and Edaily-Seoul

Respondent interviewee criteria: those who have experience investment and participant in Vietnam stock market during many years and they will give exact information as well as identified the stock market

6.3 Information Need

From the research, the thesis needed to find out:

 To get opinions about the Vietnam stock market

 To know the level of investment and aware of Vietnam stock market

 The ways which investors hope HOSE will change strategies near future

 To get recommendation from interviewee’s opinion

 How interviewees expect Vietnam stock market

 What kind of investment they want to invest if Vietnam stock market still going down (gold, banking, real estate…)

 The key drivers to influence the Vietnam stock market

 The key drivers will push Vietnam stock market upwards

 Should or should not deploy new products/services for Vietnam stock market

 Assess IT’s system, transaction system in stock market (should or should not to invest new solution package for IT system in the future)

 The difficult of information dissemination of listed companies

 Assess the information processing of HOSE

VII RESULT OF RESEARCH

Below are the findings of research results which help to understand the awareness

of market participants about Vietnam stock market as well as HOSE From the findings of research results and the development strategies of HOSE in period 2012 – 2017, the project develop marketing plan for HOSE:

7.1 The benefits from stock market

Most of interviewees are from many kind of field in industry including economist, brokers, individual investors, banks and reporters They understand and have some knowledge of stock market few years so they gave their opinions about the benefits of stock market

According to the evaluation of the benefits of the stock market, the increase of funds for enterprises is a very important The increase of funds helps companies to improve capital allocation efficiency in production, enhance highly competitive industry and the business image Moreover, some investors think that the stock market also facilitate individual investors are also very important Helping individual investors is easy to access into many investors for selecting the diversified portfolio of stocks at the many securities companies Stock investment is an attractive investment channel with high liquidity and raising capital more easily according to the opinion of an expert from Japan Securities Incorporated In addition, the development of stock market is critical for the development

of financial market Investing stocks is always associated with the banking system for the depository Some opinions think that benefits of the stock market also encourage the transparency and it is extremely important for investors When listed, companies have to report and publish information and activities of the company for investors so that they can capture the correct information in the market

7.2 Elements of a successful stock market

Elements for success in Vietnam stock market are to have a regime of disclosure and surveillance management timely and effectively The equitization of state owned enterprises has created momentum for the development of stock market is also very important Securities sector attracts to foreign investors through transparency and more public In addition, accessing WTO and the global of financial market are also the driving force behind the growth of stock market The market participants will have more responsibilities and rights under international rules

7.3 The reason - Vietnam stock market slumps down and slows growth

According to the opinion of investors, most of reasons of stock market slow growth are the lack of transparent information from enterprises and the weak infrastructure is somewhat important The weak infrastructure leads to information disclosure system slow

to investors Besides, Vietnam stock market still is young so the legal framework is unclear and needs time to build it In addition, there would not have many kind of product for investors Accessing WTO and the global of financial market also affects Vietnam stock market According to Mr Kato – General Manager & Chief Representative of Tokyo Stock Exchange Inc., he think there are mainly three reasons why Vietnam stock market went down these years One reason is weak macroeconomic problem such as inflation, depreciation of Vietnam currency and less reserved funds The second is cooperate scandals related inadequate disclosure or accounting system which might disrupt buying Vietnam stocks by foreign investors The third point is lack of attractive product such as derivatives, ETFs, REIT, etc

7.4 Understanding about the role of Hochiminh Stock Exchange

This question is to assess the interviewee to understand how the role of HOSE Most everyone knows the important role of HOSE in Vietnam stock market HOSE is one

of stock exchanges first securities trading in Vietnam Besides, HOSE is a pioneer in promoting market In Mr Kato’s opinion, HOSE cannot handle the macroeconomic issue and it should be focused on the latter two issues HOSE can review listing rule including cooperate governance and prepare the variety type of products such as derivatives, ETFs, REIT, etc and more give education to investors

7.5 HOSE always continuous to improve and promote the development of Vietnam stock market

According to the opinion of investors and experts, HOSE always reflect the role of managers to promote market development and improve the belief for investor HOSE is one of the stock market operators in Vietnam and in a closed position to the market (It has knowledge and know-how as to the stock market) It should lead an initiative continuously

to revitalize the stock market with market participants as other major exchanges are doing However, an analyst of Sakura Securities Company said that HOSE still not convince to improve the market yet with some reasons For example, HOSE cannot decide the sanction to disclosure information improperly and still depends on high agency About the operation management has not been effectively and non-professional (for example: invest equipment for trading floor and then remove it in a short time leading to waste fee costs), still not develop the new trading system

7.6 Promote strategic for HOSE in the future

Each interviewee has different opinions to contribute strategies for HOSE A first strategy that most interviewees desire to develop more products and services for investors choose such as derivatives, ETFs It is also important to give an opportunity for investor’s

education In addition, accurate and transparent information are essential for investors Recently, the stock market has a lot of information to manipulate the market such as financial reporting This information make investors lost the belief and move to invest gold, banks “Belief” and “Confidence” of the people in stability of economy and country is very important Therefore, investors always expect HOSE build the monitoring and disclosure of information system more effectively According to Mr Kato’s opinion, he believes that investors prefer liquidity in the market so increasing the liquidity is very important Strengthen current listing rule and this lead to enhance of the corporate governance of the listed company On the contrary, from the demand side, attractiveness investing in Vietnam market shall be considered, via trading rule and regulation, tax or trading system enhancement and the like

VIII TARGET SEGMENT

8.1 Vietnamese enterprises

Stock market is a level playing field for all businesses When the stock is listed, enterprises will have the ability and opportunity to raise capital directly for business expansion in the market In fact, one reason that many businesses do not want to list shares yet because they do not wish to raise capital Another reason, economic instability lead to the stock market going down and businesses no longer see the benefits of doing this Even those enterprises engaged in the stock market also faced many difficulties in the valuation, shares listing The ability to transfer shares of companies is still low because the sale of stock is not public yet and the number and percentage of corporate shareholders outside is low

According to the report of the Ministry of Planning and Investment, by the end of on 20 November 2011, there were arrangements to be 5,856 corporate and business unit has including 3,951 enterprises equitized However, there were only six enterprise listed in

2011 The volatility of macroeconomic and unfavorable development of stock market

leads to the low progress of equilization in 2011 Moreover, the equitization of large enterprises will need to implement more cautious as well as take time to evaluate and handle about financial issue in next time

Ministry of Planning and Investment will have plan to restructure state owned enterprises in the restructing of the economy and this will be promoted with the objective

of redistribution and improve the effective using resources in state owned enterprises sector in general and each state owned enterprises in particular

There will be 573 equitized enterprises by Government including some group of parent companies and corporations with 187 subsidiaries and 89 independent enterprises by the ministry and 239 independent enterprises by local management This progress of equitization will help state owned enterprises get the large-scale, highly specialized, high technology and modern management methods (Hoai Ngan, 2011)

8.2 Listed companies

Attracting listed companies also is one of the targets of Hochiminh Stock Exchange with the campaign to raise the listing criteria and information disclosure correctly to local investors as well as foreign investors Enhancing the listing criteria for listed companies improve the quality of listed goods and avoid the effect to the general reputation of the market Improving the quality of listed companies and remove some enterprises with the poor operation on the Hochiminh Stock Exchange and it helps the choice of investors A professional market must have the allocation of reasonable goods in order to create conditions favorable for investors in business portfolio selection

In 2011, the total number of listed companies on the two stock exchange have up to

700 listed companies but there were still lacked large companies representing the information technology industry and telecommunications (Vinaphone, MobiFone), food, beer, soft drinks industry (Sabeco, Habeco) These enterprises are already in business planning implementation to be listed in the last few years In 2011, the number of new

listed companies on two stock exchanges decreased over the previous year mainly due to unfavorable market Hochiminh Stock Exchange has added 25 new listed companies, decreased a half number of comapanies compared to 2010 Although the number of listed companies in 2011 has declined, the volume of listed shares is achieved by the presence of Military Commercial Joint Stock Bank (MB) In 2012, HOSE plans that the volume of listing will reach at least equal in 2011 In particular, the participation of the Bank for Investment and Development of Vietnam (BIDV) will contribute significantly in raising the volume of listed shares at HOSE (Report of Hochiminh Stock Exchange)

8.3 Investors

Investor is also the target to promote the development of the stock market by buying the securities Buying stock from investors help listed companies raise capital in the stock market The stock market decline due to the macro economy and lack of accurate information has led to a loss of investor belief and they were no longer to attract to invest stocks Most local and domestic investors change to invest another field, they sell stocks to invest gold or save money into bank with higher interest rates The sale of the stocks makes stock market goes down steadily and it also assesses stock index increasingly weaker Thus, Hochiminh Stock Exchange see local, domestic investors as well as foreign investors to attract their target invest this market Although the stock market declined, the number of investors still did not decrease much The number of local investors accounted for 1,161,237 investors’ base including 1, 157, 129 individual and 4.108 institutional This

is a huge amount

LOCAL 1, 161, 237 1, 002, 986 810,173 519,196 351, 300 Individual 1, 157, 129 999, 696 807,515 517,359 350, 000

Individual 13, 467 12, 937 12,608 11,443 8, 630

Source from HOSE: Investor accounts

The participation of foreign investors also contributes to the development of Vietnam stock market Foreign investors can hold 49% of outstanding shares or Joint Venture Company and there is no limit with bond Moreover, according to the Circular No 74/2011/TT-BTC dated on 1 June 2011 issued by Ministry of Finance related to investors can buy and sell the shares at the same time and investors can open multiple accounts at the difference securities companies This issue will help foreign investors no limit account when participate in the Vietnam stock market

Until 31 December 2011, there were 15,569 foreign investors including 13,845 individual and 1,724 institutional from many countries such as Taiwan, Korea, Japan, USA, Singapore, Thailand and Cambodia holding more than 30% of shares of listed companies and non-small proportion of government bonds, multiple bonds and corporate bonds In December 2011, there were 33 foreign investors including 24 institutional and 9 individual

issued the code by Vietnam Securities Depository (From news of VSD)

Hochiminh Stock Exchange signed the Memorandum of Understanding with ASEAN Linkage so in the future foreign investment will increase and come to Vietnam – is emerging market According to Dr Tran Dac Sinh – Chairman of Hochiminh Stock Exchange, HOSE ready the top of 15 listed companies put on the ASEAN website Although the top of 15 listed companies are not too much for foreign investors, this is a good initative beginning The ASEAN linkage would help Vietnam’s participants expand economic, investment co-operation and have vast experience in management, market organization, protection of investors’ interests, product development, and handling crises 8.4 Partners

Up to now, Hochiminh Stock Exchange has signed 22 memorandum of understanding (MOU) with foreign stock exchanges in the world The signing of this memorandum is as support of information technology, information exchange, staff training, cooperative support for cross-listing and cross-trading between two stock exchanges One of the potential MOU for HOSE is to deploy contents of some partners such as Deloitte Vietnam, Tokyo Stock Exchange, and Korea Exchange With Deloitte Vietnam, they will support training of the risk management and corporate governance for HOSE's Staffs These training help listing and examination disclosure departments of HOSE have knowledge to manage listed companies in corporate governance and increase the quality of listed company’s operation The derivatives and ETFs product are necessary products for HOSE

in the near future In the content of MOU with Tokyo Stock Exchange, they will support to introduce these products and coordinate with HOSE to organize the ETFs seminar in 2012

In addition, HOSE and Korea Exchange are deploying the new IT system for the whole market in Vietnam This is a good opportunity for HOSE in the development of stock market

In addition, Lao and Cambodia is the emerging stock market in currently and always need the support of partners and stock exchanges in neighbor Thus, the stock market of Lao and Cambodia will be the next target for HOSE in the future HOSE also has developed over 11 years, undergoing many challenges and has the experience of emerging markets This is an opportunity to support the training of staffs for two members

of this market

IX MARKETING ACTIVITIES PLAN

9.1 Products and services

Unlike other businesses, HOSE is a centralized management agency of listed companies and securities companies in Vietnam stock market - as a financial tool Vietnam Therefore, the product or service is unique for the development of Vietnam economy

HOSE organizes and operates securities trading activities on the Stock Exchange In addition, HOSE supply market information and others related to listing stocks Thus, HOSE will have some new products and increase services in the stock market

9.1.1 Products:

a VN30 Index:

In 2011, HOSE has conducted the design study of VN30 index The proposed index includes the top 30 stocks in term of market capitalization and liquidity, accounting for 80% of total market capitalization and 60% of trading value This index will overcome the limitation of current index by reducing the excessive influence of big-capital, low-liquidity stocks and reflecting the stock invest ability via free float ratio This index is expected to

be the underlying assets for advanced products in the future such as ETF, futures and an option…HOSE is targeting to launch VN30 Index in Feb 2012 To prepare for that launch date, HOSE has been building up and testing the calculating software, running the 3-year back-history data, issuing index rule as well as establishing the HOSE Index Committee (Report of Hochiminh Stock Exchange)

b Derivatives

Under the direction of SSC, HOSE has proposed the derivatives market model for Vietnam The proposal summarized the market model of the developed & emerging countries, and suggested a market structure as well as operating mechanism for derivatives market in Vietnam This will be a foundation for the development of derivatives products roadmap for HOSE

9.1.2 Services:

Trading of securities activities of Hochiminh Stock Exchange (HOSE) has been developed over more than 11 years During recent years, HOSE constantly invest, upgrade and develop trading systems to provide the market with technical facilities to meet the investment needs in time The efforts of technology improvement of HOSE help to

achieve closely with the common practice on the international market Continue to implement technical solutions to support the activities of a stock market development, HOSE identified that year of 2011 is appropriate time to apply market order/market price (MP) - an order putting tool associated with continuous matching method This order is very popular in the world but has not yet been implemented in Vietnam The provisions relating to the market order has been passed in the regulation of securities transactions in Hochiminh Stock Exchange; however, at the time of continuous matching transactions are constantly being formally launched at the HOSE on 30 July 2007 and this order has not been allowed to deploy

So far, continuous matching order has become one effective method for investors despite the current investors are used only a limit order for orders putting If continuous matching allows the system to perform matching put into a order book (without having to wait until a certain time as the periodic order matching) With the market order in principle, the order will be executed immediately at the available price on the market Therefore, market order is expected to increase market liquidity and efficient order tool for investors Market order (MP) is order to buy stocks at the lowest of selling price or sell securities at the highest of buying price available in the market

Parallel with the deployment of market order is the extension of trading time into the afternoon The extension of trading time towards more professional in the market, proceeds to the standard trading in the world stock market, improves the liquidity, increases opportunities for investors having more time in the identification, predicts the market and decides investment as well as selecting the trading time

9.2 Price

With the VN30 index, derivatives or other types of products are products providing market information for market participants easy to analyze HOSE does not charge fee to market participants so the price will not set up

9.3 Place (distribution channel)