Vietnam brokers may rally more on trading boost, retail boom

A RALLY in Vietnamese brokerage stocks is likely to extend as a new system increases trading capacity and low borrowing costs fuel an upsurge in retail investing.

The nation plans to introduce a platform that can handle three to five million orders per day, compared with the current capacity of about one million, and make settlement smoother. The central bank, meanwhile, has carried out four rounds of policy easing, helping spur an economic rebound and lure more individual investors.

“Broker shares are directly benefiting from booming liquidity,” said Tran Hoang Son, head of market strategy at VPBank Securities. Securities stocks should gain from the system upgrade as well as expectations for Vietnam to win an upgrade from FTSE Russell to emerging-market status later this year, he said.

A measure of 14 securities firm stocks compiled by Bloomberg has surged 24 per cent so far in 2024, double the advance in the benchmark VN Index. Tri Viet Securities has gained 47 per cent while FPT Securities JSC is up 43 per cent, the two best performers in the cohort.

The liquidity boost and retail trading boom have benefited the overall market as well, with the VN Index the best performer among benchmarks in South-east Asia this year. The daily trading value of Vietnamese stocks hit an almost seven-month high on Mar 8 while the new brokerage account openings reached 113,300 last month, up 80 per cent from a year ago. BLOOMBERG