Hanoi (VNA) – The stock market begins the year 2019 with hopes for growthbased on the firm foundation created in 2018 amid good indicators of thenational economy.

Despitea 9.3 percent decline of the benchmark VN – Index in 2018, the scale andliquidity of the stock market continued to expand strongly.

Themarket’s capitalization almost reached 3.9 quadrillion VND (167.7 billion USD), accounting for 70.2 percent of theGross Domestic Product (GDP). The figure showed a 10.6 percent increase from2017.

The bondmarket was valued at nearly 1.2 quadrillion VND (51.6 billion USD), up 10.5percent year-on-year and making up 20.3 percent of the GDP last year.

Thederivatives market has expanded remarkably, with an average number oftransactions at 78,800 contracts per day compared to 487 on the launch day(August 10, 2017). Indirect foreign investment inflow was estimated at 2.8billion USD, with foreign investment portfolio valued at over 32.8 billion USD.

The stockmarket has established itself as an effective capital mobilisation channel forthe economy, raising 192 trillion VND from Government bonds andGovernment-sponsored bonds, with average maturity term of 12.55 years, thelongest so far, thus meeting the needs for public investment and public debtrestructuring. Meanwhile, the issuance of shares, corporate bonds, equitisationof State-owned enterprises and divestment of State capital raised an estimated62.2 trillion VND, up 30.7 percent from 2017.

Vietnam’sstock market was considered the most successful in Southeast Asia in mobilisingfunds, Finance Minister Dinh Tien Dung said.

LeDuc Khanh, chief economist and director of strategy at the Petrovietnam  Securities Incorporated (PSI) said althoughthe domestic securities market registered a minus growth in 2018, it is anormal adjustment after the market had expanded for two consecutive years.

Henoted that the decade-high GDP growth rate along with positive macro-economic indicatorsseen in 2018 demonstrated that Vietnam is still in a period of economicexpansion.

Vietnam’smarket was affected by the US Federal Reserve’s raising its interest rates for fourtimes in 2018, changes in monetary policies in many countries, and the tradewar.

In2019, despite certain risks posed by the world situation, there are manyopportunities for the market to recover and regain growth given the internalstrength of the Vietnamese economy, Khanh said, adding that the VN Index isgearing towards 1,100-1,200 points this year.

SharingKhanh’s view, Nguyen Thanh Ky, Vice President and General Secretary of theVietnam Securities Business Association said stable foundation had been createdfor the market in 2018. Furthermore, the planned approval of the revised Law onSecurities will also facilitate the sustainable development of the market.

GeneralSecretary of the Vietnam Bond Market Association Do Ngoc Quynh was of the viewthat strong economic growth will provide a momentum for the securities marketin general and the equity and bond market in particular to grow stronger in2019.

PSI’seconomist Khanh said he expected the equitisation of SOEs and divestment ofState capital would be the centre of the stock market this year and bring moreopportunities for foreign investors.

FinanceMinister Dinh Tien Dung affirmed that his ministry, in coordination with otherministries and agencies, will continue to perfect institutions, mechanisms andpolicies for the stock market, with a focus on the revised Law on Securitiesand documents guiding the law’s enforcement.

Theministry will also take measures to improve the transparency of the market andtighten the management and supervision of the market to protect the legitimateinterests of investors, he said.

Accordingto the minister, the Vietnam Stock Exchange will be established in line withthe Prime Minister’s decision based on the rearrangement of the Hanoi StockExchange and Ho Chi Minh Stock Exchange, a step forward in enhancing theprofessionalism of the market.

Headded that several new products will be introduced on the derivatives market,and measures will be undertaken to raise the ranking of the Vietnam securities marketfrom a Frontier market to Secondary Emerging market.-VNA