Stock market size reaches 88 percent of GDP

Hanoi (VNS/VNA) – Vietnam’s stock market reached approximately 87.68 percent of the country’s Gross Domestic Product (GDP) as of the end of 2020, the highest rate reported so far.

The other two high rates recorded were in August 2018 at 84.57 percent and March 2018 at 83.08 percent.

Including the government bond market and corporate bond market, the value of Vietnam’s entire stock market by the end of 2020 exceeded 110.64 percent of GDP, this is also the highest rate ever recorded.

New cash flow continuously pouring into the market since the second half of 2020 has boosted liquidity. December 2020 and January 2021 were two months witnessing record matching value, of more than 250 trillion VND (10.8 billion USD) and more than 300 trillion VND on the Ho Chi Minh City Stock Exchange (HoSE), respectively.

However, skyrocketing liquidity has far exceeded market forecasts, leading to frequent congestion in many sessions, causing a lot of trouble for investors and affecting the quality of the market.

The sudden increase in liquidity is unpredictable, causing undesired interruptions in trading, according to HoSE.

To tackle this issue, the State Securities Commission said it was speeding up the implementation of a new information technology system for the entire stock market, known as KRX.

The Vietnamese stock market has experienced a year of spectacular recovery from the bottom caused by the COVID-19 crisis, a trend that is in parallel with most of the major stock markets in the world. Since the bottom at the end of March 2020, the VN-Index has increased by nearly 50 percent.

So far, the Vietnamese stock market recorded 38 companies whose value reaches billions of dollars. Vingroup is valued at 15.95 billion USD in market capitalisation. It is followed by the State-owned Vietcombank (VCB), with 15.82 billion USD. Third place belongs to Vinhomes (VHM) with 14.52 billion USD.

Other notable names include Vinamilk with 9.52 billion USD, Bank for Investment and Development of Vietnam (BID) with 7.62 billion USD, PetroVietnam Gas JSC (GAS) with 7.43 billion USD, the Airports Corporation of Vietnam (ACV) with 7.03 billion USD, and Hoa Phat Group (HPG) with 6.56 billion USD.

The Masan family is no less competitive as there are also three representatives, Masan Group (MSN) with 4.61 billion USD, Masan Consumer Holdings (MCH) with 2.92 billion USD and Masan High-Tech Materials Corporation (MHT) with 1 billion USD.

Some unfamiliar names also appear in the billion-dollar business group, with surprises in value. Most notably ThaiHoldings (THD) valued at 3.06 billion USD, became the third largest real estate company in the market by market capitalisation after Vinhomes and Novaland, the latter of which is valued at 3.41 billion USD.

Another real estate company has also entered the group, namely Phat Dat Real Estate Development Corporation (PDR), valued at 1.08 billion USD.

THD shares have risen 10 times since the end of November last year, now reaching 201,000 VND. While PDR has also nearly tripled from August last year, standing at 63,000 VND./.