There was a time when the idea of a stock market named for Ho Chi Minh would have seemed absurd. A generation after Vietnam achieved the late communist leader's dream of independence, the Ho Chi Minh Stock Exchange's main index is one of Asia's top performers. Vietnam now is firmly established on a market-oriented path. The economy is growing at an annual rate of 7%, foreign investment is pouring in. Like its northern neighbour, China, Vietnam seems intent on making up for time lost.
The long-term prospects of Vietnam are tremendous. There is a young, dynamic population that is eager to improve their lives. Developing well-oiled capital markets is essential for Vietnamese capitalism to take root. The past two years have seen the market grow from 41 listed firms valued at less than $1 billion to 206 stocks with a market capitalisation of around $22 billion. That's an impressive progress, but there is much more pontential for the market in the future. The VN-Index ended the year of 2017 at over 984 points, up 48% compared to 2016. The liquidity of the stock and bond markets rose by 65% and 39%, respectively. Listed enterprises in the market also witnessed positive results in business activities with revenue in the first 9 months of 2017 up 18%. The stock market successfully established itself as a channel for medium- and long-term capital mobilisation for the Government and businesses. It greatly contributed to the equitation of and divestment from State-owned enterprises, as well as effort in attracting foreign investment to Vietnam.
The derivatives market opened in 2017, and has also developed rapidly, helping to perfect the structure of the stock market in particular and the financial market in general. The stock market is expected to continue its development both in term of scale and quality. As such, the State Securities Commission is required to work with related administrative agencies on 5 priority tasks.
Firstly, finalizing policies and mechanism, including the revised law on securities; improving the monitoring efforts to ensure the safe and transparency for the stock market and the security of the national finance system.
Seconldy, restructuring the stock market in the direction of merging two stock markets in Hanoi and Ho Chi Minh, combining with the roadmap to restructure the stock market, governmental bonds and derivatives; continuing restructuring intermediaries in the market.
Thirdly, developing new products and markets to complete the structure of Vietnam's stock market; reviewing new mechanism to mobilize capital for start-ups through stock market. Fourthly, organizing auctions and transaction process for governmental bonds to timely mobilizing capital for state budget and investment. Fifthly, to facilitate the equitization process of state owned enterprises (SOE) and the divestment from SOE.
The year 2018 is set to mark the beginning of Vietnam's next stage of financial growth, with the Vietnamese stock market upgraded to emerging market status in late 2019 or early 2020. The finance, energy and manufacturing sectors will experience strong growth, which means they are likely to be recommended to both up-and-coming and experienced investors by financial experts. With Vietnam's fast-growing consumer economy, the manufacturing and energy sectors will always be attractive. Aviation is another safe bet, as living standards and tourism increasing,
The 2018 growth target approved by the National Assembly, of 6.5 to 6.7 percent, shows a certain lowering of expectations and an increase in caution, compared to 2017. At the moment, stock market investors are pouring capital into securities and real estate, forming an indirect growth channel for the Vietnamese economy.