Viet Dragon Securities becomes market maker for local ETF

Viet Dragon Securities is expected to improve the fund's liquidity and trading capabilities

Market makers, usually a brokerage firm, provide purchase and sale solutions for investors in order to keep the exchange-traded fund (ETF) liquid. They can add to or withdraw from the supply of units by trading directly with the ETF issuer, usually in large volumes.

Market makers thus assume the risk of holding a large amount of ETF units in order to facilitate market trading for the ETF. The appointment of Viet Dragon Securities as VFMVN30’s second market maker, similarly, is aimed to boost the liquidity of the ETF.

Managed by Viet Fund Management since 2014, VFMVN30 tracks the movements of the VN30 Index, which includes the top 30 stocks on the Ho Chi Minh City Stock Exchange in terms of liquidity, market capitalisation, and free-float percentage.

Luong Thi My Hanh, chief investment officer at Viet Fund Management, said that ETFs rely heavily on the reputation and technical know-how of market makers, who ensure efficient liquidity and maximise the trading capabilities of the fund.

“We are delighted that Rong Viet Securities is now our second market maker, amidst significant liquidity increases and foreign inflows to the Vietnamese capital markets,” said Hanh.

The CIO expressed hopes that VFMVN30 ETF will become increasingly attractive to global investors, who look to benefit from the next stage of the Vietnamese growth story.

Marc Djandji, head of Institutional Sales at Rong Viet Securities, said that the brokerage looks forward to providing better access and liquidity for the ETF.

“This cooperation will undoubtedly expand our product capabilities. We intend to provide benefits to our investors with our well-established brokerage capabilities,” said Djandji.

Rong Viet Securities is listed on the Hanoi Stock Exchange, with a market capitalisation of $30 million.