The Launch of the KRX Trading System at HOSE: A New Era for Vietnam’s Stock Market
On May 5, the Ho Chi Minh City Stock Exchange (HOSE) celebrated a milestone with the official rollout of its new KRX trading system. This technological upgrade marks a significant advancement for the Vietnamese stock market, and it didn’t take long for the VN-Index to reflect this positive shift, registering a notable rally on the same day.
Initial Trading Experience
The trading day began with minor hiccups during the ATO (At The Opening) session, attributable to the system transition. However, these disruptions were temporary, and the market quickly stabilized. The cautious pace of the morning gave way to a strong recovery in the afternoon, as investors shifted from caution to optimism. The broad-based gains underscored a positive shift in market sentiment, indicating investor confidence in the new system.
Sector Performance
A closer look at the day’s trading reveals a remarkable performance across various sectors. Stocks associated with public investment, utilities, and raw materials experienced bullish momentum. Notably, several stocks reached their daily upper limits, including GEX, VSC, GEG, BWE, BFC, and CSV.
Prominent performers included:
- HSG: surging 6.16%
- NKG: up by 3.78%
- DCM: climbing 4.95%
- DPM: gaining 4.28%
- POW: rising 3.8%
The financial sector also exhibited a strong upward trend, particularly within banking and securities. Significant boosts were seen in:
- NAB: +3.32%
- EIB: +1.58%
- VIB: +1.15%
- BVB: +1.68%
In the securities arena, VIX jumped 4.18%, with FTS and VND climbing by 1.74% and 1.71%, respectively.
Real Estate Stocks on the Rise
Real estate stocks were another highlight of the trading day. Companies under the Vingroup umbrella thrived, with:
- VHM: rallying 4.28%
- VRE: leaping 5.29%
- VIC: adding 2.94%
Other noteworthy gainers included:
- KBC: rising 3.74%
- NLG: jumping 5.26%
- DIG: up by 2.72%
- IDC: climbing 3.59%
- KDH: gaining 3.04%
- HDC: advancing 3.0%
VN-Index Performance
By the end of the trading session, the VN-Index recorded a gain of 13.75 points, equating to a 1.12% increase, closing at 1,240.05 points. The encouraging numbers were bolstered by a strong showing from 233 advancing stocks, against just 85 decliners and 47 that remained flat.
On the Hanoi Stock Exchange, the HNX-Index mirrored this upward trend, adding 0.87 points, or 0.41%, to settle at 212.81 points, supported by 95 advancers and 77 decliners.
Trading Liquidity
Despite the positive index performance, total trading liquidity sharply declined. The total trading value on HOSE reached just over VND 14.3 trillion, a decrease of approximately VND 1.3 trillion from the previous session before the holiday, raising questions about investor engagement in the wake of the technological transition.
Interestingly, foreign investors emerged as net buyers, recording a net purchase of nearly VND 126 billion. In contrast, the most heavily sold stocks included VRE (about VND 130 billion), MSN (nearly VND 41 billion), and NLG (around VND 40 billion).
The Transition to KRX: A Comprehensive Upgrade
The shift to the KRX system represents more than just a technological enhancement; it signifies a thoughtful endeavor to improve the overall functionality of Vietnam’s securities market. According to Ms. Tran Anh Dao, Deputy General Director of HOSE, the transition, which began on April 29 and culminated on May 4, involved a multitude of stakeholders. These included HOSE, the Hanoi Stock Exchange (HNX), the Vietnam Securities Depository and Clearing Corporation (VSDC), and over 90 market members.
Data migration to the KRX system has been successfully completed, culminating in a full-scale market trial on May 3. Final checks, including member connections and database monitoring, were conducted on May 4, ensuring the readiness of the new system for trading.
The KRX system is designed to comprehensively manage trading and settlement activities, covering stocks, bonds, and derivatives. It aims to connect various market participants through a unified platform while offering advanced monitoring features. By merging the operations of HOSE, HNX, and VSDC, the KRX seeks to streamline processes and enhance efficiency.
Looking Ahead
The launch of the KRX trading system is seen as a critical step towards elevating Vietnam’s stock market from its current frontier market status to that of an emerging market. This transformation is expected to attract significant international capital, positioning Vietnam as an attractive destination for investors.
In addition to the KRX launch, HOSE unveiled its newly revamped website, further signaling its commitment to modernization and improved user engagement.
Final Thoughts
As HOSE embarks on this new journey with the KRX system, the implications for Vietnam’s financial landscape are profound. Investors, both local and international, will be closely monitoring how these upgrades will foster growth and stability in the Vietnamese stock market.