Pocket Option: What are Common Stocks
Common stocks currently account for 95% of transactions on HOSE and HNX with over 7.1 million Vietnamese investors participating as of 2024. This article provides a detailed analysis of the nature, characteristics, and benefits of common stocks in the Vietnamese market context, along with practical investment strategies to help you maximize profits and minimize risks.
Basic Concepts of Common Stock
What is common stock? According to Vietnam's 2020 Enterprise Law, it is a type of security that confirms an investor's ownership of a portion of the charter capital of a joint-stock company, giving the owner voting rights, dividend rights, and other basic rights.
What is ordinary stock? This is another term for common stock, commonly used in everyday investment language in Vietnam. Despite having different names, both common stock and ordinary stock refer to the same type of security, representing basic ownership in a business.
In the Vietnamese market, as of March 2025, there are 1,679 stock codes trading on three exchanges: HOSE (392 codes), HNX (355 codes), and UPCOM (932 codes), with a total market capitalization of nearly 8 million billion VND (equivalent to 320 billion USD), of which common stock accounts for over 95% of all traded stocks.
The most prominent feature of common stock is voting rights, allowing investors to directly participate in important business decisions. According to regulations of Vietnam's State Securities Commission, each common share corresponds to one vote at the general meeting of shareholders (GMS).
| Characteristic | Common Stock | Preferred Stock |
|---|---|---|
| Voting rights | Full (1 share = 1 vote) | None or limited according to company charter |
| Dividend order | After preferred shareholders | Priority before common shareholders, fixed rate |
| Liquidation payment order | Last, after creditors and preferred shareholders | Before common shareholders, after creditors |
| Price appreciation potential | Unlimited based on business performance | Usually limited due to fixed dividends |
Rights of Common Shareholders in Vietnam
When owning common stock in Vietnam, investors enjoy specific rights according to the 2020 Enterprise Law and the 2019 Securities Law. Pocket Option platform particularly focuses on providing complete information about these rights to help investors optimize their benefits.
Financial Rights
Financial rights are the main driver for investing in common stock in Vietnam, especially in the context of sharp decreases in savings interest rates to 3.8-4.7% in 2024-2025. The main financial rights include:
- Dividend rights: According to FiinGroup data, the average dividend yield of companies listed on HOSE in 2023 reached 5.7%, with some companies like DGC (9.5%), MWG (8.2%), VNM (7.8%) having very attractive dividend yields
- Rights to purchase additional shares: Priority to buy before public offering in proportion to current ownership
- Rights to assets upon dissolution: Distribution of remaining assets after payments to creditors and preferred shareholders
- Transfer rights: Free trading on HOSE, HNX, and UPCOM exchanges with high liquidity (average trading value exceeding 15,000 billion VND/session in Q1/2025)
It is notable that companies listed on HOSE have an average dividend payout rate 1.2% higher than the 12-month savings interest rate at major banks in early 2025, making common stocks a more attractive investment channel in terms of passive income.
Management and Control Rights
The greatest privilege of voting common stock is the ability to influence business strategy and operations. In Vietnam, these rights are specifically regulated as follows:
| Management Right | Details and Practical Application in Vietnam |
|---|---|
| Attend and vote at GMS | Since 2021, most listed companies allow online voting, helping investors save time and costs |
| Elect, dismiss members of BOD, BOS | At VNM's 2024 GMS, a group of shareholders holding 6.5% successfully nominated 1 independent BOD member |
| Approve financial statements | Contributes to transparency, 87% of listed companies have financial statements audited by Big4 |
| Decide on material matters | Approve M&A, restructuring (such as FPT's separation of FPT Retail and FPT Telecom in 2017) |
According to the 2020 Enterprise Law, shareholders or groups of shareholders owning 5% or more of the total common shares also have additional rights to nominate people to the BOD and BOS, inspect accounting books, and request extraordinary GMS meetings. This right is particularly useful when shareholders want to oppose decisions that may be detrimental to the company.
Characteristics of Common Stock in the Vietnamese Market Context
What is common stock in the specific context of the Vietnamese market? Compared to developed markets, common stock in Vietnam has distinctive features that investors need to understand.
Vietnam's stock market has only been operating for 24 years (since 2000) but has developed rapidly with many important reforms. The outstanding characteristics of common stock in Vietnam include:
- High price volatility: The average Beta coefficient of VN30 stocks reaches 1.2-1.5, much higher than 0.8-1.0 in developed markets like Singapore or Hong Kong
- Concentrated ownership structure: 62% of listed companies have controlling shareholders holding over 51% of capital, of which 35% are state-controlled enterprises
- Improved information transparency: The rate of timely information disclosure increased from 72% (2018) to 91% (2023), with penalties for disclosure violations increasing 5-fold since 2020
The foreign ownership limit is an important characteristic of the Vietnamese market. According to Decree 155/2020/ND-CP, sensitive sectors such as banking (30%), insurance (49%), telecommunications (49%), publishing (0%) have specific foreign ownership limits. Many blue-chip stocks like VCB, TCB, MWG have reached maximum foreign ownership, creating significant price differences between domestic and foreign transactions.
| Indicator | 2020 | 2021 | 2022 | 2023 | Q1/2025 |
|---|---|---|---|---|---|
| Number of investor accounts (million) | 2.8 | 4.3 | 6.2 | 7.1 | 7.8 |
| % of population participating in the stock market | 2.9 | 4.4 | 6.3 | 7.2 | 7.9 |
| Market capitalization/GDP (%) | 84.1 | 93.8 | 62.5 | 78.2 | 83.5 |
| Proportion of individual investors (%) | 83.6 | 86.2 | 87.5 | 85.3 | 83.7 |
Pocket Option provides in-depth analytical tools to help investors identify these characteristics and use them to build effective investment strategies. Pocket Option's exclusive dashboard also provides real-time information on foreign trading, ownership ratios, and remaining room for each stock code.
Analysis and Valuation of Common Stock
To successfully invest in common stock in Vietnam, investors need to apply analysis methods suitable for the market's specific characteristics. A combined approach of both fundamental and technical analysis usually brings optimal results.
Fundamental Analysis for Vietnamese Common Stock
Fundamental analysis evaluates the intrinsic value of a stock based on business performance and growth potential. According to Pocket Option's survey of 1,500 successful investors in Vietnam, the following indicators are prioritized for analysis:
| Indicator | Formula | Good reference levels in VN (2025) | Example stocks |
|---|---|---|---|
| P/E (Price-to-Earnings) | Stock price / EPS | Banking: 8-12Retail: 12-18Technology: 15-25 | TCB (9.2), MWG (16.5), FPT (19.8) |
| P/B (Price-to-Book) | Stock price / Book value | Banking: 1.2-2.0Real Estate: 1.8-3.0Manufacturing: 1.5-2.5 | VCB (2.8), VHM (2.1), HPG (1.6) |
| ROE (Return on Equity) | Net profit / Shareholders' equity | Banking: >15%Retail: >20%Manufacturing: >12% | MBB (24.3%), PNJ (22.7%), DGC (18.5%) |
| Dividend yield | Dividend per share / Stock price | Power: >6%Telecom: >5%FMCG: >4% | POW (7.2%), VNM (5.8%), MSN (4.2%) |
A peculiarity of the Vietnamese market is the need to focus on shareholder structure analysis and insider transactions. According to statistics from the Pocket Option platform, 78% of stocks that outperformed in the 2021-2024 period had net buying transactions by insiders in the previous 3-6 months. This is a reliable signal about business prospects that investors should monitor.
Investment Strategies for Common Stock in Vietnam
Success when investing in common stock in Vietnam depends on building a strategy suitable for the market context and personal financial goals. Based on data from 10,000+ successful investors on the Pocket Option platform, we summarize the most effective strategies:
- Value investing: Look for stocks with P/E 20-30% lower than industry average, but ROE at least 15% higher than industry average (Example: TCB, HPG, DGC in 2022-2023 period)
- Growth investing: Prioritize companies with revenue and profit growth rates >20%/year for 3 consecutive years, combined with business models having sustainable competitive advantages (Example: FPT, MWG, ACB)
- Dividend investing: Build a portfolio of stocks with dividend yields >5%, consistent payment history >5 years, and dividend payout ratio <70% (Example: VNM, REE, NT2)
A sector-specific approach is particularly effective in the Vietnamese market, with certain sectors showing stronger growth trends in different stages of economic development:
| Market characteristic | Impact on strategy | Potential sectors/stocks (2025-2026) |
|---|---|---|
| Uneven liquidity | Focus on stocks with trading volume >500,000 shares/day to ensure ability to exit positions when needed | VN30 Index, Mid-caps with high liquidity: FPT, MWG, HPG, VRE |
| Strong cyclical fluctuations | Allocate capital in phases, avoid all-in at one time | Allocation: 30% Blue-chip (VCB, FPT), 40% Mid-cap (DGC, MWG), 30% Potential small-cap (DIG, PVD) |
| Influence from foreign capital | Monitor ETF money flow and large funds like Dragon Capital, VinaCapital | Stocks in FTSE Vietnam ETF, VNM ETF baskets: VHM, VIC, VNM, VRE |
| Benefiting from FDI trends | Prioritize sectors benefiting from FDI shifts into Vietnam | Industrial parks (IDC, VGC), Logistics (GMD, HAH), Power (POW, REE) |
Pocket Option's smart portfolio building tool helps Vietnamese investors analyze and track portfolio performance in real-time. In particular, Pocket Option's exclusive "Portfolio Optimizer" feature suggests periodic portfolio adjustments to optimize returns according to the Sharpe ratio.
Comparing Common Stock with Other Investment Tools
To make optimal asset allocation decisions, Vietnamese investors need to evaluate the advantages and disadvantages of common stock compared to popular alternative investment channels in Vietnam in 2025.
| Criteria | Common Stock | Corporate Bonds | Bank Deposits | Real Estate |
|---|---|---|---|---|
| Average return 2020-2024 | 15.8%/year (VN-Index) | 8.5-11.2%/year | 4.2-5.7%/year | 7.5-12%/year |
| Risk (standard deviation) | High (23.7%) | Medium (5.8%) | Low (0.5%) | Medium-High (15.2%) |
| Liquidity | T+2.5 (VN30: T+0 via Pocket Option) | Low-Medium (depends on issuer) | Low (early withdrawal penalty) | Very low (3-6 months) |
| Minimum investment capital | ~1 million VND | ~50-100 million VND | ~1-10 million VND | ~500 million - 5 billion VND |
| Management rights | Yes (GMS voting) | Limited (only in default) | None | Full ownership rights |
In the context of savings interest rates in Vietnam falling to record lows (only 3.8-4.7%/year for 12-month terms at major banks like Vietcombank, BIDV in Q1/2025), common stock becomes a more attractive investment channel with expected returns 3-4 times higher. According to Pocket Option statistics, 83% of Vietnamese investors have transferred at least 30% of their savings portfolio to stocks during 2022-2025.
A special advantage of voting common stock is the ability to influence businesses when holding a large enough percentage. In Vietnam, many individual investors have succeeded in joining the BOD of small and medium-sized listed companies, helping improve governance and increase business value (such as the cases of DXG, SHS, AAS in the 2021-2023 period).
Risks When Investing in Common Stock and Prevention Methods
Despite the high profit potential of common stock, Vietnamese investors need to fully identify the specific risks of the market to have effective prevention measures.
- Market risk: The VN-Index has experienced strong corrections such as -27% (03-04/2022), -18% (08-11/2022), causing many investors to suffer heavy losses
- Business risk: Incidents such as accounting scandal at HVN (2022), debt crisis at FLC, ROS (2022-2023) caused significant damage to shareholders
- Liquidity risk: Many smallcap stocks have low trading volume (<100,000 shares/day), making it difficult to exit positions during market volatility
- Psychological risk: 72% of individual Vietnamese investors admit to having bought/sold based on rumors or FOMO (Fear of Missing Out)
Pocket Option recommends specific risk prevention measures based on behavior analysis of 10,000+ successful investors on the platform:
| Risk | Prevention measure | Support tools from Pocket Option |
|---|---|---|
| Market risk | Asset allocation: 60% core stocks, 25% growth stocks, 15% cash/bonds | Portfolio Optimizer, Market Heat Map |
| Business risk | Due diligence: Check financial statements for the last 3 years, pay attention to cash flow, debt, and related parties | Financial Health Scanner, Insider Trading Alert |
| Liquidity risk | Prioritize stocks with trading value >10 billion/day, use conditional orders when trading | Liquidity Rating, Smart Order Types |
| Psychological risk | Build and adhere to specific investment plans, use automatic stop-loss orders | Investment Plan Builder, Auto Stop-loss |
An interesting fact is that contrary to popular belief, the "DCA" (Dollar-Cost Averaging) strategy is usually more effective than the "bottom fishing" strategy in the Vietnamese market. According to Pocket Option's internal research on 2018-2024 data, investors using DCA achieved an average profit of 12.3%/year, 3.7% higher than the group frequently trying to "catch the bottom" of the market.
Development Trends of the Common Stock Market in Vietnam
Smart investors need to grasp the development trends of the common stock market in Vietnam to position their investment portfolio in line with future prospects.
According to the latest data from the State Securities Commission and SSI Research as of Q1/2025, Vietnam's stock market capitalization has reached 83.5% of GDP (equivalent to 320 billion USD), with 7.8 million investor accounts. Compared to the average market cap/GDP ratio of 110-150% in developed markets in the region, Vietnam still has significant growth potential.
The main trends shaping the future of the common stock market in Vietnam:
- Market upgrade: Vietnam is on the roadmap to upgrade from frontier market to emerging market according to MSCI and FTSE Russell, expected in 2026-2027. When upgraded, international ETF capital flow estimated at 5-7 billion USD will pour into the market.
- Corporate governance reform: The 2019 Securities Law and guiding circulars have strengthened protection for minority shareholders, requiring a minimum ratio of 1/3 independent BOD members from 2025.
- Market digitalization: Application of blockchain technology in securities registration, development of new KRX system improving matching speed from T+2.5 to T+1.5 from 2025.
- Product diversification: Strong development of sector ETFs, thematic ETFs, covered warrants, and new derivative products.
Pocket Option has quickly adapted to the digitalization trend by launching a new generation trading platform in Q4/2024, allowing Vietnamese investors access to advanced features such as Smart Beta Screening, ESG Rating Integration, and AI-powered Trading Signals.
According to exclusive data from over 100,000 investors on the Pocket Option platform, the trend of long-term common stock investment is growing strongly in Vietnam. The proportion of investors pursuing long-term strategies (>12 months) has increased from 37% (2020) to 68% (Q1/2025), showing the maturity of the market and increasing investor awareness of the benefits of long-term investment.
Conclusion
What is common stock? It is not just a certificate of ownership in a business, but also a powerful financial tool helping Vietnamese investors build assets, participate in corporate governance, and benefit from the development of the national economy.
Vietnam's common stock market is in a dynamic development stage with many attractive investment opportunities, especially when considering the prospects of market upgrade, improved corporate governance, and digitalization of the trading system. However, along with opportunities come specific risks that investors need to identify and prevent.
Pocket Option not only provides an advanced trading platform but also equips Vietnamese investors with analytical tools, in-depth knowledge, and practical investment strategies suitable for the domestic market context. From building diversified portfolios to smart risk management tools, we are committed to accompanying investors on their journey to successful investment in common stock in Vietnam.
In the context of low savings interest rates and the need to find high-yielding investment channels, common stock is gradually becoming the priority choice of many Vietnamese investors with the right knowledge and strategies. Start your common stock investment journey with Pocket Option - a reliable partner on the road to financial freedom.