Derivatives market soars in September

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Vietnam’s derivatives market officially launched August 10, 2017 according to an announcement from the Hanoi Stock Exchange. “This will help attract more foreign investors, institutional investors in particular, and boost market liquidity,” the stock exchange said in a statement. Stock index and government bond futures contracts were the first to begin trading.

In September, just weeks after beginning operation, 9,679 accounts were trading on the market, up 34.5 percent from the end of August. As of the end of September, four contract codes traded on the market were VN30F1710, VN30F1711, VN30F1712 and VN30F1803.

Up to 131,903 contracts worth 10.3 trillion VND were carried out in September, soaring by 126.7 percent and 136 percent from the previous month. Market liquidity concentrated on short-term contracts, which also matched international practice.

Transaction activities were mainly conducted by domestic investors. Those by foreign investors also surged with 123 contracts, equivalent to 0.05 percent of the total contracts made on the market.

Investors who were organizations began transactions on the derivatives market last month, making 397 contracts or 0.15 percent of the total number of contracts.

Derivatives trading is a way to attract investment to Vietnam’s capital markets and enhance the Vietnamese financial industry. The futures market would initially launch stock index contracts, and when fully operational, more instruments will be introduced.

The VN30-Index, which is reviewed periodically, captures the performance of the 30 largest companies by market capitalization on the Ho Chi Minh city stock exchange. The futures contracts are allowed to move by a maximum of 7 percent in each session.

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