New securities accounts in the first 7 months of 2020 exceeds the whole year 2019

13-Aug-2020 Intellasia | BizLIVE | 6:02 AM Print This Post

Data from the Vietnam Securities Depository (VSD) showed that domestic investors opened 27,169 new securities accounts in July, the lowest number since the Covid-19 outbreak in Vietnam in March 2020 to present. In the previous four consecutive months, the number of newly opened accounts was always above 30,000.

In the first seven months of 2020, domestic investors opened approximately 193,000 new securities accounts, surpassing the number of new accounts opened in 2019 (nearly 189,000). In particularly, the number of new accounts opened since the outbreak of Covid-19 (March until now) is nearly 165,000 accounts.

The entry of new investors, or “F0 investors” has made an important contribution to the strong recovery of the Vietnam’s stock market from 650 points at the end of March to 900 points in early June, as well as the stability in the present period although the pandemic has recurred.

The sharp decline of the market due to the Covid-19 pandemic has attracted many people who have never invested in securities to open “bottom fishing” accounts.

According to many securities companies, in nearly 165,000 newly opened accounts since March, besides many accounts of small investors, there are also large-scale accounts from a few dozens to hundreds of billion dong.

VSD’s data also pointed out that in July 2020, the number new accounts opened by foreign investors was 205, the highest number since the Covid-19 outbreak in Vietnam since March until now.

In July, foreign investors only net sold 465 billion dong in the whole market, the most positive number since February (excluding VHM put through order in June). The net buying trend of foreign investors has even been taking place from the end of July until now.

By the end of July 2020, the number of securities accounts in Vietnam reached 2.57 million accounts, equivalent to 2.7 percent of the population of Vietnam.

Talking about the stock market in August and the last months of 2020, some securities companies provided relatively optimistic comments on the market developments.

For example, Mirae Asset Vietnam said that based on the forecasted corporate profit growth which was adjusted to negative one percent, and Price to Earnings (P/E) target which moves around 13-15 times, Mirae Asset expects the VN Index to fluctuate within 780 900 points for the remaining time of the year.

Mirae Asset added that the recurrence of Covid-19 right after the economy’s very first signs of recovery shows that the economy and businesses are still in a vulnerable period. To a certain extent, the market experiences unprecedentedly prolonged instability.

Viet Dragon Securities Company (VDSC) said that the market would not react too negatively because investors have become more experienced. In addition, the stock market still proves to be fairly attractive in the context when cash flows are stagnant and other investment channels have not had much prosperity.

However, Vietnam’s economy has not yet recovered as expected and this second wave will slow the pace significantly.

“We believe that the market can fluctuate in a range of 780 860 points. In the negative case of the epidemic which causes the government to announce social distancing order in two big cities Hanoi and HCM City, the VN Index may drop to 720 points,” VDSC’s report mentioned.


Category: Stocks, Vietnam

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