Stock market to face IT challenges in 2018

From January 22 to January 24, the Ho Chi Minh City Stock Exchange (HSX), Vietnam’s benchmark stock market, encountered technical failures that caused the entire trading system to shut down completely, preventing the stock market from recording the closing price for the index.

On January 25, the exchange returned to normal trading, stating the reference prices for each stock recorded on the last trading session.

Supported by the Stock Exchange of Thailand, the HSX platform’s trading system was brought into operation in 2000. Such unwanted incidents like the technical glitch occurring on January 22 were deemed to be the result of the swift market growth, as the system was designed for the early stages of the market.

HSX encountered major technical issues on January 22-24, bewildering investors and market members

Trinh Hoai Giang, deputy CEO of Ho Chi Minh City Securities Corporation (HSC), asserted that the bourse would welcome brand-new products such as covered warrant (CW) and future options, making it an investment beacon for foreign and domestic investors looking for prospective market opportunities.

Riding the fin-tech wave sweeping across the region, the Vietnamese stock market would certainly have to keep up with the technological currents which could provide various benefits to its members and investors, such as lower transaction costs, quicker transaction pace, and stability as well as security across the entire electronic trading platform.

In the past several years, large securities companies such as HSC, SSI, VNDS, MBS, and VDSC made massive investments into upgrading the software of their trading systems. In contrast, a substantial number of small- and medium- securities companies kept operating on the outdated trading platform, posing even more challenges to trading performance as more and more complicated transaction issues were recorded.

Over the span of 2017, the VN-Index saw a 48 per cent rise against the same category in 2016 which was the highest growth rate of Vietnam’s capitalisation-weighted index recorded over the last 10 years. Likewise, the liquidity ratio of the stock market and stock funds were up 66 per cent against the same categories in 2016. In addition, the derivatives market was recently activated, making vast contributions to market liquidity.

According to an announcement by Vietnam Securities Depository (VSD), the total number of accounts registered at VSD reached two million in late December 2017, reporting exponential increase throughout the year.

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