Top stock market highlights of 2014

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The events were chosen based on the public attention and media coverage they garnered. Their effects on the market as a whole were also considered.

A year with upheavals

The stock market was hit by a series of external factors. The typical issues that affected the stock market included disputes over the East Sea and the turmoil on the global oil market.

The East Sea issues, which surfaced in April, caused the VN-Index to lose more than 11 per cent to reach only 508.51 points. Meanwhile, the HNX-Index fell by 13 per cent to reach 68.74 points before rebounding. The indexes plunged to 27.8 per cent and 6.7 per cent due to declining oil prices since late November.

Circular 36 curbing money to the market

Circular 36/2014/TT-NHNN, released on November 20 and scheduled to take effect on February 1 next year, will re-regulate the capital adequacy ratio in financial institutions. The circular states clearly that banks shall not offer securities loans beyond five per cent of the charter capital. A number of operational conditions were included in the circular.

In addition, the Congress issued Resolution 78 in November. This stated that there will no longer be government bonds under a five-year term starting next year. This was viewed as a significant impact on money to the bond market.

Stock market restructuring clinging on targets

Re-organising the securities companies was one of the vital pillars of the overall market restructuring project. There are currently only 81 firms from 105 companies. In addition, the State Securities Commission and stock exchanges were evidently proactive in developing new investment products.

Equitising SOEs and listing shares

The privatisation of 432 state-owned enterprises was determined through the initial public offerings (IPOs) of the biggest SOEs such as Vietnam Airlines and Vinatex.

The first 10 months this year saw 100 SOEs equitised. Meanwhile, divestment from non-core businesses hit over VND3.5 trillion, which increased by 3.6 times compared with the data obtained from the previous year.

First domestic ETFs introduced

In line with the restructuring project, Viet Nam's first exchange-traded fund E1VFMVN30 was created in July. It was listed on the HOSE in October, with an initial size of VND202 billion.

The second ETF – SSIAMHNX30 – was granted licence also in October and will list certificates next Monday.

Therefore, investors now have another long-term indirect investment option. This will particularly benefit foreigners who want to invest in shares, but ran out of room for foreign ownership.

Flourishing growth

The total value of traded government bonds on the secondary market since the beginning of this year reached more than VND810.9 trillion ($38.5 billion), doubling that of 2013. In addition, the average trading value per auction jumped to over 100 per cent and reached nearly VND3.5 trillion ($167 million).

Derivatives prepared to be started The government decided to build in March a detailed scheme on establishing the Vietnamese derivative market. A decree on the structure was handed to the government by the Ministry of Finance and the State Securities Commission.

Transforming market

The Ministry of Finance and the commission have carried out a series of promotional programmes in European and Asian countries since earlier this year to introduce investment opportunities in Viet Nam. The agencies are expected to target the United States market in their next tour. These steps were taken to transform the domestic stock market from a frontier market to an emerging market, as standardised by Morgan Stanley Capital International.

Viet Nam has thus far joined the International Organisation of Securities Commissions and signed multilateral memorandum of understanding with 25 European nations.

Rising stars

Speculative stocks with surging trading volume arose in 2014. These particularly pertained to property developer FLC (FLC) and retailer KLF Investment (KLF). FLC saw a three-session accumulated volume of 113.6 million shares last month, occupying 36 per cent of the company's total outstanding shares and reaching a value of VND1.44 trillion.

Meanwhile, KLF experienced a gross number of around 79 million shares in mid-November, which is equivalent to VND1.06 trillion or 52 per cent of the outstanding shares.