SECURITIES MARKET IN VIETNAM FROM 2008 TO PRESENT

THỊ TRƯỜNG CHỨNG KHOÁN VIỆT NAM TỪ NĂM 2008 NỬA ĐẦU NĂM 2017 Chủ đề được nghiên cứu bởi Nhóm 1 Lớp Ngân hàng Chất lượng cao Khóa 57 Trường Đại học Kinh tế Quốc dân (National Economics University) Gồm các thành viên sau: 1. Nghiêm Thị Minh 2. Phạm Thị Thanh Hằng 3. Đặng Quang Anh 4. Vũ Mai Phương 5. Phạm Quang Hưng

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CHAPTER 1: THEORIES BASIS6

1.1 The concept, structure and role of the stock market

1.2 Classification of stock market

1.3 The holder may operate on the stock market

1.4 The principle of operation of the stock market

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2.3 Vietnam stock market in the period from the year 2010 - 2014

2.4 Vietnam stock market in the period from 2015 - the first half of 2017

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A INTRODUCTION

1.1 Reasons for choosing the topic

The Vietnam’s economy joining the WTO (November 7, 2006) has developedsignificantly In that development, it was necessary to mention the financialmarket, especially the stock market, which made a great contribution to the overalldevelopment of the economy Market scale has sharply increased over the years.But from the end of 2007 to the present, the world and domestic economicsituation has a lot of fluctuations in exchange rates, fuel, natural disasters,epidemics, especially the fluctuations of financial markets, because affected by theworld financial crisis originated from the financial crisis in the United States(started in 2007 and officially boomed in 2008 then spread to other countries in theworld also in 2008)

Vietnam's financial market is also affected by the stock market Typically, thestock price continuously declines on the two exchanges in Hanoi and Ho Chi MinhCity The bottom of the market was established at the end of the trading session onJune 20, 2008 with 366.02 points But on October 23, 2008, VN-Index officiallybroke the record with 360.43 points Thus, it caused great damage to the stabilityand development of the Vietnamese economy In order for the Vietnamese stockmarket to overcome difficulties due to the global financial crisis and to developcomprehensively and sustainably the stock market in the future, we must study theproblems that affect the stock market's decline to give the appropriate developmentpolicies in the future

Therefore, researching the topic "Analyzing the stock market in Vietnam from

2008 to now" is very necessary It will give economists a more multidimensional

vision to take measures to develop the stock market as well as boost our country'seconomy in the future.

1.2 Study objectives

1.2.1 General objective

Analysis of the situation following the Vietnam stock market from 2008 to thepresent from which proposed solutions to develop Vietnam's stock market in thefuture

1.3 Scope of the study

1.3.1 Scope of space (study area):

This study was performed within the State of Vietnam

1.3.2 Scope of the time (period or time of the study):

Subject used data from 2008 - the first half of 2017

1.3.3 Research Subjects:

Subjects of the study subjects are love Figure Vietnam stock market (particularlyfluctuations in the VN-Index and HNX-Index HOSE HNX saw from 2008 -present)

1.4 Research methods

1.4.1 The method of data collection.

Collect information, secondary data via the Internet, sales reports and journals are relevant to the subject Then, process the information to have a panoramic view

on the subject of research

1.4.2 The method of data analysis.

Statistical analysis method description and comparison of the secondary data werecollected from the situation of Vietnam stock market operations to implement thegoals of the subject

B ANALYSIS

CHAPTER 1 THEORIES BASIS

1.1 The concept, structure and role of the stock market

1.1.1 The concept of the stock market.

The stock market is a market that in the place that people buy to sell, transfer,stock exchanges, the paper notes the medium and long term debt (usually from 1year and over) aims to make words

In countries with developed market economy, the stock market was a marketconcept has organized and controlled activity, was the purchase-sale of securitiesbetween the medium and long term securities issuers and securities purchases orsales of securities The stock is the deed or the journal entry number to confirm therights and legitimate interests of the owner and can buy and sell, transfer on themarket

1.1.2 The organizational structure of the stock market

From any one stock market of any country, whether newly established ordeveloped, it is constituted by a two-part market of the organizations different:-The primary market (primary market) also known as stock market release, the firstphase of the stock market launch

-Secondary market (secondary market) also known as the secondary market, wherethe purchase - sale of securities issued on the primary market and is an importantpart of the stock market, is inextricably linked with primary market

1.1.3 The role of the stock market

Stock market play a role contributing to the development of the economy, creatingconditions to attract and control foreign investment, stimulate business enterprisemore efficient and healthier The stock market is the immediate mobilization ofcapital without affecting inflation and monetary policy implementation, theevaluation tools business.

1.2 Classification of stock market

1.2.1 Based on the legal side, the stock market is divided into the following categories

- Market transaction or transaction or a listed market focus

- Market focus - OTC market

- The third market

- The fourth market

1.2.2 Based on the location of release, the stock market is divided into two types:

- The official stock market - Stock trading

- The informal stock market

1.2.3 Based on the method of trading, stock market is divided into two types:

- The market for immediate delivery

- Futures market

1.2.4 Based on the characteristics of the types of goods circulating on the stock market, the stock market is divided into three types:

- Stock markets

- Bond market

- The market the stock origin tool

1.3 The holder may operate on the stock market:

The organizations and individuals involved in the stock market can be divided intothe following groups: the Publisher, investors and organizations related tosecurities

1.4 The principle of operation of the stock market:

1.4.1 Intermediate principle:

All the transactions, buying and selling securities on the stock market are madethrough intermediaries, also known as the international model.Brokers trading onthe orders of customers and commissions In addition, brokers can also provideother services such as providing information and advice to clients in theinvestment

In principle intermediaries, investors can not directly deal with each other to buy orsell securities They are going through their brokers to place orders The brokerwill enter channels into the system for matching orders

1.4.2 Auction principle:

Stock price is determined through the auction between the buy and sell orders Allmarket participants are not able to intervene in the determination of this price.There are two forms of the auction is a live auction and auction automatically:

- Direct Auctions is the broker met on the trading floor and live auction

- Auto Auctions is the trading orders from the gender dimensions are entered intothe host system of the stock exchanges The host system will determine thepremium for at this price, the stock trading at the highest volume.

1.4.3 The principle of publicity.

All the activities on the stock market shall ensure publicity The stock exchangeannounced the information on securities transactions on the market Theorganizations listed on the public disclosure of the financial information of thecompany's annual, extraordinary events happen to the company, holding stocks ofthe director, the manager, the majority shareholder.The information as is publiclytransparent, the more attracted investors to participate in the stock market

CHAPTER 2 ANALYSIS OF THE SECURITIES MARKET OF VIETNAM FOR

THE PERIOD FROM 2008 TO PRESENT

2.1 Vietnam stock market in 2008

- The down trend was the main trend in 2008

- Vn-Index plunged 70%, Hastc-Index dropped below 100 points

- Investors on both HOSE and HASTC stepped up the sale of their shares to raisecapital

- Foreign investment in the stock market fell by nearly 50% compared to 2007

Graph 2.1: The performance of VN-Index and HASTC-Index in 2008

(Source: finance.vietstock.vn)

Factors affecting Vietnam's stock market in 2008:

- Strongly influenced by the world financial crisis

- The market tended to sell out so stock prices more and more decline

- State Bank implemented monetary policy tighted to control inflation were highdouble digits State banks implement monetary policy tightening, withdraw cashfrom circulation that commercial banks lack of cash forced to raise interest rates tomobilize capital Due to high interest rates led many investors to exit the market.They promote and sell shares in a bank depositor has highly profitable and secure

2.2 Vietnam stock market in 2009

- Vietnam's stock market has quickly rebounded following the economic recovery

- The VN-Index increased 171.96 points from 312.49 to 494.77, equivalent to 58%

- Similar to the HASTC, the growth of HNX-Index was 60.9%

- Hanoi Securities Trading Center (HASTC) converted into a stock exchange(HNX)

- Established UPCoM market for public companies registered to trade.

Graph 2.2.1: VN-Index's performance in the year 2009

(Source: finance.vietstock.vn)

Graph 2.2.2: HNX-Index's performance in the year 2009

(Source: finance.vietstock.vn)

Factors affecting Vietnam's stock market in 2009:

- Monetary and fiscal easing policies have been effective against the economicdownturn

- GDP growth of 5.32%, exceeding the plan

- Inflation target of less than 7%

2.3 Vietnam stock market in the period from the year 2010 - 2014

In the period from 2010-2014, Vietnam stock market due to the impact of the macro-economy, the influence of the great events in and outside the country,

so the stock market Vietnam in this period trends mainly sharp decline and not much remarkable growth.

In 2010, the market was down after rising sharply 235 points to 630 points Thedecline and accumulation of the market made the whole market in 2010 almostfluctuate in the 485 +/- 65 points Ending the year at 484.66 points, the VN Indexhas dropped 10.11 points, or 2% compared to 494.77 points as at 31/12/2009

In summary, the main trend of 2010 was to go sideways and fall sharply Themarket received a new volume of listings and additional stock listing record

Graph 2.3: The performance of VN-Index and HNX-Index in 2010

(Source: finance.vietstock.vn)

In 2011, this was a difficult year for Vietnam and the world economy, which hashad a negative impact on the Vietnamese stock market For the whole year, themarket was barely rallied in two short rallies in late May and mid - August; the rest

of the market remained largely depressed in the boredom and fatigue of traders Atthe end of trading session on December 30, 2011, VN Index and HNX Indexclosed at 351.55 and 58.74 points, respectively Compared to early 2011, HOSEdropped sharply by 27.46% while HNX slumped to over 48.6%

The liquidity of the stock market also fell sharply, compared with the number of

2010, the average value of each trading session of each floor slumped sharply toapproximately 60%

- Securities companies were in trouble and bear a loss

Graph 2.4: The performance of VN-Index and HNX-Index in 2011

(Source: finance.vietstock.vn)

- A 40% increased in the first five months of the year followed by a sharp drop inthe remaining seven months, Vietnam's stock market in 2012 resembling thewitch's poisonous apple in the story "Snow White and the Seven Dwarfs."

- August 21 - The day was considered "The Dark Tuesday" of Vietnam stock

market Bank shares were sold floor continuously, the margin cut the marketalmost plunged "not brake"

- For the first time, the VN30 and HNX30 were applied

- Compared to the peak in May, despite the strong recovery in December, Index still dropped 20% and HNX-Index decreased 36%

VN-Graph 2.5: The stock index fluctuation in the year 2012

(Source: finance.vietstock.vn)

- The stock market has gone through a rather quiet year in 2013, not to face thesame scandal, as it did last year In contrast, the market received positive macrosupport such as the 30 trillion dong real estate bailout package and the bad debtdeal through the Vietnam Asset Management Company (VAMC), two this factorhelped the market prosper in the first half of the year

- VN-Index increased nearly 23%; The HNX-Index surged more than 13%compared to the end of 2012 Vietnam stock market was considered one of thecountries with the strongest recovery in the world

Graph 2.6: The performance of VN-Index and HNX-Index in 2013

(Source: finance.vietstock.vn)

In 2014, this was a year of fluctuations with many unexpected events took place, if

the beginning of the year smoothly and the market rose "beautiful" help investors pockets swell, from mid-year on many stock indexes “groggy”.

In particular, VN-Index dropped the strongest point of the year was 08/05, whenChina put drilling platform in Vietnam's exclusive economic zone In this session,the VN Index has dropped to 32.88 points, representing 5.87% of the sharpestdecline in nearly 13 years, since 03/10/2001; The HNX-Index dropped 6.4% from76.5 to 71.66

Graph 2.7: The performance of VN-Index and HNX-Index in 2014

to raise capital race, creating a significant pressure on the stock market

- World gold prices started to rise again and set a new record At one point in justover ten days time period, gold has rised a circuit from 32 million /tael to 39million /tael, led many large profits in a short time only Gold immediately became

an attractive investment channel, sucking money from the stock market part Theexplosion of the gold market was not only suck away a certain amount of capitalfrom the stock channels, but also create macroeconomic instability makes the stockmarket more difficult.

- Along with that, macroeconomic appear signs of instability, concerns aboutinflation and the devaluation of the VND has led many people "take refuge" in thiscurrency, causing demand to buy USD spike USD exchange markets in earlyNovember freedom at times has reached 21,500 VND / USD

- Besides, the base rate was adjusted increase from 8% to 9%, pushing the interestrate on the mobilization of commercial banks quickly increased Again the suddenchange of monetary policy caused the stock market to be affected VN-Index after

a long time passing have plummeted, losing more than 30 points only in the firsthalf of November, touching the lowest level, point 419.98 levels by the year 2010

on 22/11

- In 2011, Inflation increased (up to 23%) instead of 4% as commercial banksreported The macro uncertainty about the banking system began to appear

- Fiscal and monetary policies are tightened

- Savings deposits became an attractive investment channel with deposit rates of18-20%, especially in the first September of the year, before the SBV stepped upits discipline in the market

- Uncertainty of investors in the banking sector as bad debt increased in the secondhalf of 2011

- The SBV's official announcement on the Non-performing Loan (NPL) ratio of thewhole system up to 10% in 2012