The market poses less risk to F0 investors

23-Oct-2020 Intellasia | Da utu Chung khoan | 6:02 AM Print This Post

With many concerns about the “safety” of investors F0 when the wave of new investors entering the market is more and more exciting, securities experts say there is no need to worry too much.

At the talk show of Rise of Vietnam’s stock market post-Covid-19 held on October 21, by the Vietnam Securities Economics Magazine, Ta Thanh Binh, director of the Department of Securities Market Development (Commissioner State Securities Commission) shared, 2020 was a volatile year, we had witnessed a time of strong increase and decrease, especially in the first quarter due to the influence of Coivd 19. VN Index fell by 33 percent in the first quarter of 2020.

However, Vietnam’s stock market had recovered well with more positive performances than various countries in the region and around the world. “We have almost regained what we lost from the beginning of the year. Market capitalisation reached 71.3 percent of GDP”, said Binh.

Notably, the market’s climb received a positive push from domestic cash flow, especially a number of new investors entering the market. In September, there were 31,418 new securities accounts opened by individual investors, accumulated in the first nine months of 2020, reaching 252,026 accounts, 34 percent higher than the number of new accounts opened in 2019 (180,000 accounts).

The number of accounts and the transaction accelarated, making the market increasingly exciting. The average trading volume on the Hochiminh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX) in the second and third quarters increased nearly 40 percent over the same period last year.

Faced with the question of whether the group of F0 investors will bear many risks due to lack of experience, knowledge of securities investment, Le Duc Khanh, director of Investment Capacity Development Department of VPS Securities JSC shared, through discussions with many investors, it could be seen that most of them wanted to stick with the market for a long time, especially in the context of other investment channels were less attractive, interest rates remained low.

The number of new investors has increased, but there is still room for growth in the market. Valuation of stocks on the market is still low, P/E of the market is about 16, growth rate is not too hot.

Besides, according to Khanh, the Vietnamese market is following a fairly steady upturn. Cash flow is growing alternately, apart from banks, there are materials manufacturing and consumer group. There are still many stocks that are adjusting. “From my point of view, the market is not hot and does not pose great risks to investors. Of course, investors still need to be cautious, choosing basic stocks”, said Khanh.

Sharing the same point of view, Bui Hoang Hai, director of the Department of Securities Offering Management, State Securities Commission shared, at the project of restructuring the stock market and insurance market to 2020 and orientation to 2025, the target number of investors in the market will reach 3 percent of the population. By 2025, this number is raised to 5 percent of the population.

Accordingly, until now, the target for the number of investors in the market to reach 3 percent of the population has been nearly achieved this year. Compared with many other countries around the globe, the proportion of investors in Vietnam is still very low, for example in the US, 51 percent of the population has an investment account. In Asean countries such as Indonesia, Thailand, and Malaysia, the proportion of the population with stock trading accounts is over 20%. Meanwhile, in China, according to 2015 data, 15 percent of the population has stock accounts.

“Although the number of investors has increased, compared to the population is still very low. Besides, the number of nearly 3 percent entering this market is relatively risk-tolerant. The factor that evaluates investors professionally is the ability to judge and withstand the risks,” said Hai and said that the direction of the regulator was to gradually restructure the investment force, distributed reasonably. For example, some market segments only allowed professional investors to participate (issue private bonds).

 

Category: Stocks, Vietnam

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