The terms “securities market” in Viet Nam is quite strange to the public while in many countries in the world, it have been developing dynamically. The securities market has its own attraction because of its important role to a national economy and interest for investors. Investing and growing securities market is one of the best ways to enrich our economy and create many opportunities for us. It can be only flourished if there are lots of investors with enough knowledge about securities. This report will provide some information about securities market in Viet Nam, make clear kinds of securities and introduce some major participants in Viet Nam capital market. Realizing the importance of securities market, we should spend more time learning about this market to make intelligence investing decision in securities, which can make our national economy more and more strong.
I.Overview about Vietnam securities market
Security is a fungible, negotiable instrument representing financial value. There are three main categories in s security: equity securities; debt securities such as banknotes, bonds and debentures; and derivative contracts, such as forwards, futures, options and swaps. (The International Business Times http://www.ibtimes.com/business-law/detail/667/securities-law/) The Vietnamese stock market, formally known as the Securities Trading Centre (STC), located in Ho Chi Minh City, was launched on July 28th 2000. At the opening trading session, only two individual stocks with a total market capitalization of VND 444,000 million (about USD 27.95 million) were traded on the market. Over five years of operation (at the end of 2005), the number of listed companies have increased to 32 with a total market capitalization of VND 6,337,478 million (USD 398.96 million). Although the market has significantly grown over the period, it is still rather thin. In 2011, the Vietnam’s stock market has experienced a lot of shock because the index constantly fell miserably. Closing the session in 2011, only the VN-Index and HNX-Index closed at low level with 351.55 and 58.74 score respectively. Thus, compared with the beginning of 2011, the floor in HCM city stock exchange had fallen by 27.46% and 48% in Hanoi stock exchange. This is surprising figures. The change in the market transaction is quiet and gloomy. the causes of this decline are directly affected by issuers from macro-economic situation in the country such as the pressure of interest rate, exchange rate, inflation ,debt problem and recession in Europe, and so on. II. Types of securities
Recently, economists generally focus very much about how to raise capital for businesses and one of the most important capital channels is the stock market. Recently, the stock market has experienced a significant growth in both size and quality. However, we should not only focus on developing market share without paying attention to the development of bond markets. Therefore, we need to develop mechanisms and policies to promote and develop sustainable future markets. a. Government bond
A government bond is a bond issued by the Vietnamese government, generally promising to pay a certain amount (the face value) on a certain date, as well as periodic interest payments. Bonds are debt investments whereby an investor loans a certain amount of money, for a certain amount of time, with a certain interest rate, to a company or country to offset the budget deficit, funding for public works, regulate flow of money in circulation. The government issued institutional debt since 2000, steady levels of 8.3-8.6% prior WTO. The Congress also allows the Government Issue 45,000 billion bonds to the public in 2012. The features of this bonds is no default risk , may be exempt from Government taxes, small scale issuance and discrepancy in maturity, interest rate and dealing practice small trading volume. b. Municipal bond
Bond is issued by a state, city, or local government. In...