In the absence of newly listed companies, Vietnam’s stock market is “quiet”

In the past, the tsunamis of Vietnamese stocks were often associated with the wave of “blockbuster” IPOs listed on the stock exchange besides joining important organizations and trade agreements.

Looking back at the development history of more than 22 years, the Vietnamese stock market has experienced many tsunamis that pushed the VN-Index to increase rapidly. Although the contexts are different, the real waves in the past are imprinted with the massive wave of IPO blockbusters on the stock exchange.

2006-07 period : The first time to the top, the popular business “landed” on the floor

From 300 points at the beginning of 2006, VN-Index has increased nearly 4 times after more than a year and had the first historic peak in March 2007. The growth driver during this period, besides the story of Vietnam joining the World Trade Organization (WTO), also came from the wave of businesses “landing” on the stock exchange, which was still young.

In just 2 years, HoSE has welcomed more than 100 new stocks, including a series of “big names” such as Vingroup (VIC), FPT, Binh Minh Plastics (BMP), PV Drilling (PVD), Bao Viet Securities (BVS). ), Binh Dinh Minerals (BMC), Sudico (SJS), DHG Pharmaceuticals (DHG), Sacombank (STB), SSI, etc. Most of the stocks that used to have “excessively high” market prices set records in the range of this time.

In addition, the driving force for the market at that time also came from the wave of divestment and equitization of many corporations, corporations and businesses in the backbone sectors of the economy, typically commercial enterprises. equitization services of Bao Viet, PVFC, Phu My Fertilizer, Vietcombank… Especially, Vietcombank’s deal also created a great influence and attracted the attention of both domestic and foreign investors.

2009: Strong rebound, more new businesses on the stock exchange

After a period of hot growth, the valuation of Vietnam’s stock market was pushed to an unimaginable level (P/E 4x according to Bloomberg). A plunge at that time was inevitable. The global economic crisis in 2008 and tight monetary policy due to inflationary pressure contributed to engulfing the market.

From the bottom in February 2009, VN-Index reversed to increase 2.5 times after only about half a year, marking one of the most classic retracements in history. This period also witnessed many “terrible goods” listed on the floor such as Masan (MSN), Bao Viet (BVH), Petroleum Construction (PVX) … or a series of banks such as Vietcombank (VCB), VietinBank (CTG), SHB, Eximbank (EIB).

The retracement wave ended when there were no more quality “new products” on the floor, although 2010 recorded a record number of listed companies. The stock market barely made any significant waves for the next half decade or so. Listing and listing activities of enterprises were also quieter when there were only a few notable deals of MB (MBB), PV Gas (GAS), BIDV.

Period 2015-18: Returning to the top of history with a series of state-owned and private enterprises that went public and sold capital

It took 11 years after the first peak, VN-Index returned to the old peak after a wave lasting more than 2 years with the motivation from the “hit” IPO deals in the period 2015-18. Besides state-owned oil and gas enterprises such as Petrolimex (PLX), PV Power (POW), PV Oil (OIL), Binh Son Refinery and Petrochemical (BSR), private groups with “blockbuster” such as Vinhomes VHM), Vincom Retail (VRE), Vietjet Air (VJC), VPBank (VPB), … also left a strong impression.

In addition, this period also witnessed a turning point with the issuance of Decision 51/2014/QD-CP. SOEs after equitization required to be listed on the stock exchange have created a new wave of goods, in which there are many notable “names” such as Airports (ACV), VEAM (VEA), DAP – Vinachem (Vinachem). DDV), Rubber Group (GVR), Becamex IDC (BCM), EVNGENCO 3 (PGV), Sabeco (SAB), Habeco (BHN)…

The appearance of many quality “commodities” has attracted strong cash flows into the stock market in the period 2015 – 2018. In which, record capital sales have appeared during this period such as deals. Vinhomes’ hit IPO earned $1.35 billion or a record capital sale at Sabeco helped the State earn more than $5 billion.

After the tsunami passed, IPO deals were also “sparse”, the market became bleak in 2019 before the “black swan” event called Covid-19 changed everything.

Period 2020-21: Continuously setting new peaks with new “wave” of bank stocks

After hitting the bottom of Covid at the end of March 2020, Vietnam’s stock market has recovered strongly and quickly regained what was lost. VN-Index continuously broke through and surpassed historical peaks, and even continuously set new highs. The main driving force driving the market at this stage came from the wave of new investors with abundant cash flow thanks to the low interest rate environment.

However, it is impossible to ignore the wave of banks landing on the stock exchange under the project “Restructuring the stock market and insurance market to 2020 and orientation to 2025”. With the low P/E characteristic, the appearance of a series of bank stocks has contributed to making the valuation of the Vietnamese stock market relatively cheaper, thereby easily attracting new cash flows.

In turn, Viet Capital Bank (BVB), Nam A Bank (NAB), Saigon Industry and Trade Bank (SGB), MaritimeBank (MSB code), Viet A Bank (VAB)… all traded on UpCOM during the period. period 2020-21. Orient Commercial Bank (OCB), SeABank (SSB) listed for the first time while LienVietPostBank (LPB), Asia Commercial Bank (ACB), International Bank (VIB) also moved to HoSE.

There are not many names worth waiting for

From the beginning of 2022 until now, IPO and stock listing activities have been very dismal. Notable listed names such as Gelex Electric (GEE), An Cuong Wood (ACG) or the “big man” of the electricity industry EVNGENCO 3 (PGV), Deo Ca Transport Infrastructure (HHV) have moved from UpCOM to HoSE. did not produce any really noticeable effect.

Activities capable of creating new products for the listing floor, such as equitization of SOEs associated with listing, or divestment of State capital in SOEs through the exchange, have had very limited results in recent years. According to the Ministry of Finance, accumulated in the period 2016-2020, there have been 180 enterprises approved by competent authorities for equitization plans, but only 39/128 equitized enterprises are on the list of equitization according to Official Letter No. 991/TTg-DMDN and Decision No. 26/2019/QD-TTg of the Prime Minister (reaching 30% of the plan).

Enterprises that have not been able to carry out equitization and divestment are mostly small-scale in localities. The names that are really interested by investors are only counted on the fingers such as Agribank, Vinacomin – TKV, Mobifone, VNPT, SJC, Vinafood1.

The list of 141 enterprises to be divested by the State in the period 2022-2025 according to Decision No. 1479/QD-TTg dated November 29, 2022 of the Prime Minister also does not have many notable names, most of which are small enterprises. enterprises under the Provincial People’s Committee with not too large scale.

Meanwhile, the private group also doesn’t have many “hot” businesses to wait for other than a few names like Thaco, TH True Milk, Tan Hiep Phat… However, the roadmap for these names is still on the floor. open. Absence of IPO “blockbuster” makes the stock market lack of quality “new goods”. The wave of new investors has skyrocketed, but there are not many new options.

The number of new accounts opening is constantly increasing, but trading is almost exclusively focused on a few familiar codes. The growth of the capitalization scale mainly comes from the rotation of the upward speculative cash flow. However, this is unlikely to continue in the near future, especially when the cheap environment is no longer available.

In addition to the story of “new goods”, the tsunamis in the past are often associated with milestones related to international trade such as joining the World Trade Organization (WTO) in 2006, signing the Agreement Vietnam-Japan Economic Partnership (VJEPA) in 2009, Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CTPPP) 2018, Vietnam – European Union Free Trade Agreement (EVFTA) 2020 or the Regional Comprehensive Economic Partnership (RCEP) in early 2022… After many years of negotiating efforts, Vietnam has now joined most of the important organizations and trade agreements. Therefore, this catalyst is also unlikely to appear more in the near future.

However, the long-term prospect of Vietnam’s stock market is still considered positive thanks to the stable macro and the growth expectation of listed companies that will soon recover from the recession. In addition, the increasingly clear upgrade prospect is expected to pull foreign investors back stronger, thereby contributing to promoting the development of the stock market in the future.

Ha Linh/Market Lifestyle