Strong liquidity in Vietnam stock markets boosts stock exchanges revenue

Amid the Covid-19 pandemic that causes severe economic impacts, strong liquidity in Vietnam’s stock market was a key reason leading to a surge in revenue of the country’s two major stock exchanges.

Two major stock exchanges saw a surge in revenue in the first half of 2020.

The Hanoi Stock Exchange (HNX) in its financial statement for the second quarter reported a 28% rise year-on-year in revenue to VND336 billion (US$14.48 million), of which the majority came from securities transaction, making up 88% of the total revenue, followed by government bond auctions with 4.8%.

This resulted in the stock exchange’s gross profit of VND289 billion (US$12.46 million), up 31% year-on-year, and a pre-tax profit of VND231 billion (US$10 million), up 8.4%.

Similar to HNX, the Ho Chi Minh City Stock Exchange (HOSE), home to the majority of large-caps, posted revenue of VND382 billion (US$16.46 million), up 17% year-on-year, with securities transaction accounting for 85% of total.

HOSE recorded an increase of 21% year-on-year in gross profit to VND351 billion (US$15.13 million) and a pre-tax profit of VND239 billion (US$10.3 million), up 19%.

Statistics from VNDirect Securities revealed the average liquidity for a trading session in the first half of 2020 rose 24% year-on-year to VND5.8 trillion (US$250 million), thanks to a surge in the amount of capital injected into the stock market.

It is estimated that over 25,000 new securities accounts were registered monthly in the January – June period, an increase of 53% year-on-year.

Vietnam was one of the best performing markets in the world in August as the VN-Index increased by 10.4% month-on-month.

A report from Viet Dragon Securities Company (VDSC) suggested the upward momentum of August and the expectation of new foreign capital could support the benchmark VN-Index to surpass its June peak at 900 points, and possibly reach 920.