Local derivatives market busy after only one year of operation
Vietnam’s derivatives market has maintained a monthly growth rate of 35 percent since it was launched one year ago, according to the Hanoi Stock Exchange (HNX).
Hanoi (VNA) – Vietnam’s derivatives market has maintained a monthly growthrate of 35 percent since it was launched one year ago, according to the HanoiStock Exchange (HNX).
The volume of transactions has enjoyed a strong growth rate sinceMay 2018.
Compared to the total of 487 contracts that were transacted onthe launch day (August 10, 2017), the market saw a record high on July 6, 2018with 164,872 contracts. The average number of transactions in 2018 reached 58,613contracts per day, up 5.3 times against that in 2017.
The number of derivative accounts has steadily increased, with153 new accounts activated each day. As of July 31, there were 39,631 accounts,of which 11,225 have made transactions.
Individual investors account for 95 percent of the total inthe derivatives market, compared to the 90 percent figure in the wider stockmarket.
Domestic organisations made 1.41 percent of the total transactionsconducted in the past year. Foreign investors meanwhile transacted 23,305contracts, or 0.12 percent of the total.
HNX, the market’s operator, said that the derivatives marketis an effective solution to keep investors by preventing them from withdrawingcapital when the stock market suffers downtrends. Data from internationalmarkets show that liquidity on the derivatives market rises significantly whenthe stock market’s points decrease.
The derivatives market opens at 8:45am, 15 minutes earlier thanthe opening hour of the stock market, and closes at 3pm. Prices of products areallowed to fluctuate by /- 7 percent and price quotation is 0.1 VN30 indexpoint.
Each transaction unit is one contract. Contract units arevalued at 100,000 VND per VN30 index point. The last trading day is the thirdThursday in the month of maturity.The month of maturity is the currentmonth, the following month, and the last two months of the next two quarters. –VNA
The derivatives market proved its attractiveness when the value of transactions in this market rose threefold in April, when the stock market posted a downward trend, according to the Saigon Securities Inc. (SSI).
The derivatives market has grown strongly over the last three months as investors switch from stocks to derivatives to avoid short-term risks on the stock market.
The derivatives market proved its attractiveness when the value of transactions in the second quarter doubled the amount recorded in the previous quarter to over 417.7 trillion VND (18.4 billion USD), according to the Hanoi Stock Exchange (HNX).
The Vietnam Securities Depository (VSD) will apply a new minimum initial margin ratio of 13 percent from July 18 instead of the previous 10 percent for VN30 Index futures to avoid violations and ensure the security of the derivatives market.
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Illustrative image (Source: VNA) 
