Creating a robust legal framework for derivatives in Vietnam is an uphill, but neccessary, task Photo: Le Toan According to the Hanoi Stock Exchange (HNX), as of July 31, 78,445 trading accounts have been opened in the Vietnamese derivatives market, almost twice as many as in the same period last year. The volume of open interests increased 2.5 times from 8,077 contracts at the end of 2017 to 20,494. The Stock Exchange of Singapore has revealed intent to co-operate with its local counterpart to develop derivatives products on Vietnamese stocks, which will be listed on the Singapore exchange to serve as an investment and risk-hedging tool for foreign investors, demonstrating the huge potential of the fast-growing segment. However, unlike other developed countries where institutional investors account for a larger share of trading, Vietnamese individual investors, made up 91.15 per cent of the total trading volume at the end of July. The remainder consists of institutional and foreign investors at 1.54 and 0.58 per cent, respectively. A fund management company’s representative told VIR that legal restrictions on investment activities, which were often introduced long before derivatives were launched in Vietnam, are the biggest obstacles. “If institutions want to be part of… Read full this story
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