Pocket Option: Full Article on Common Stocks in Vietnam
The Vietnamese stock market is growing strongly, with the VN-Index exceeding 1,200 points in many periods. This article provides an in-depth analysis of common stocks in Vietnam, helping you understand the characteristics, risks and investment opportunities, thereby building an investment strategy suitable for Vietnam's economic conditions in 2025.
Nature and Importance of Common Stocks in the Vietnamese Market
Common stocks account for 92.7% of daily trading value on HOSE and HNX, with an average volume of 587 million shares/session in Q1/2024. These are corporate ownership certificates that allow investors to receive dividends and voting rights corresponding to their ownership percentage, as stipulated in Article 113 of the Enterprise Law 2020.
Vietnam's stock market, established in 2000 with the VN-Index at 100 points and only 2 listed codes, has developed remarkably with 1,658 listed codes in 2024 and reached a peak of 1,530 points in April 2022. While savings interest rates are currently only 3.5-4.5%/year, stocks have generated an average return of 12-15%/year over the past decade, becoming an attractive investment channel for 5.8 million Vietnamese investors.
The characteristics of common stocks in Vietnam are clearly demonstrated through large fluctuations, with an average amplitude of 2.3%/day, 1.5 times higher than the Thai and Singapore markets. Liquidity reached 15.3 trillion VND/session in 2023, a 28% increase compared to 2020, but still has a gap compared to developed markets in the region.
| Factor | Vietnamese Market (2024) | Comparison with Thai Market |
|---|---|---|
| Liquidity | 15.3 trillion VND/session (~621 million USD) | 1.8 billion USD/session (2.9 times higher) |
| Price Volatility | Range of ±7%/session, actual average 2.3% | Range of ±30%, actual average 1.5% |
| Information Transparency | Ranked 54/87 in transparency (CG Watch) | Ranked 29/87 (25 places higher) |
| Average P/E | 14.8 (Q1/2024) | 17.2 (16% higher) |
According to a report by the State Securities Commission published in March 2024, Vietnam has reached 5.8 million securities accounts, equivalent to 5.9% of the population. Experts from Pocket Option assess that this number will reach 8 million accounts by 2026, thanks to the digital transformation in account opening and online trading, along with the trend of decreasing savings interest rates.
Characteristics of Common Stocks in the Vietnamese Market
Common stocks in Vietnam have unique characteristics, shaped by the Securities Law 2019 and Enterprise Law 2020, along with the rapidly evolving market practices with 45,000 billion VND of new capitalization from IPOs in 2023.
Specific Rights and Obligations of Common Shareholders in Vietnam
According to Article 115 of the Enterprise Law 2020, common shareholders in Vietnam enjoy the following specific rights:
- Voting rights with a 1:1 ratio (one share - one vote) at the AGM
- Right to receive dividends with an average rate of 5.7% cash in 2023 (higher than savings interest rates)
- Preemptive rights to purchase additional shares according to their current ownership ratio
- Right to access periodic and extraordinary information according to Circular 96/2020/TT-BTC
- Right to sue board members and the executive board for management violations
In Vietnam, small individual shareholders often face difficulties in exercising their rights to access information and participate in decision-making. According to an IFC survey in 2023, only 42% of listed companies provide complete information to shareholders before the AGM within the 21-day deadline, and only 23% of companies organize online meetings for shareholders who cannot attend in person.
The characteristics of common stocks in Vietnam are also reflected in the concentrated ownership structure. A survey of the 100 largest listed companies shows that 72% of businesses have major shareholders holding over 51% of capital, significantly higher than 43% in Thailand and 37% in Singapore, directly affecting the decision-making power of small shareholders.
| Characteristic | Actual Data (2023-2024) | Impact on Individual Investors |
|---|---|---|
| Concentrated Ownership Structure | 72% of businesses have major shareholders holding >51% of capital | Limits ability to influence decisions, but sometimes protects from volatility |
| Dividend Policy | Average cash dividend rate of 5.7%, highest in banking (8.2%) and electricity (7.5%) | Stable passive income, higher than bank interest rates |
| Liquidity | Top 10 stocks account for 43% of total market liquidity | Difficulty exiting positions with small-cap stocks |
| Margin Ratio | Allows margin loans up to 50% of portfolio value, with interest rates of 12-14%/year | Leverage opportunity, but also increases liquidation risk when markets decline |
Experts from Pocket Option point out that a key characteristic of the Vietnamese market is the strong "herd behavior" phenomenon. Analysis of 2023 trading data shows that 68% of individual investors tend to buy/sell following crowd trends, leading to FOMO (Fear Of Missing Out) and creating price volatility of over 15% in 10 sessions with penny stocks like FLC, HAG, HQC without any changes in fundamentals.
Classification of Common Stocks on the Vietnamese Stock Exchange
The Vietnamese stock market with 1,658 listed codes is classified into various groups. Understanding this classification helps investors choose stocks that match their financial goals and specific risk tolerance levels.
Classification by Market Capitalization and Liquidity
In the 2024 Vietnamese market, common stocks are classified into the following groups based on market capitalization:
| Stock Group | Market Capitalization | Number (2024) | Specific Examples |
|---|---|---|---|
| VN30 | Over 10,000 billion VND | 30 codes (accounting for 73% of total market capitalization) | VCB (127,000 billion), VIC (278,000 billion), VHM (133,000 billion) |
| Mid Cap | 1,000 - 10,000 billion VND | 142 codes (accounting for 22% of capitalization) | GMD (15,800 billion), DXG (9,200 billion), NLG (8,500 billion) |
| Small Cap | 300 - 1,000 billion VND | 225 codes (accounting for 4.5% of capitalization) | ITA (834 billion), FLC (421 billion), HAG (598 billion) |
| Micro Cap | Under 300 billion VND | 1,261 codes (accounting for 0.5% of capitalization) | HQC (143 billion), QBS (78 billion), RDP (54 billion) |
The main indices in the market include VN-Index (representing 404 stocks on HOSE), VN30 (30 largest capitalization stocks), HNX-Index (353 stocks on HNX), and UPCoM-Index (901 stocks on UPCoM). Over the past 5 years, VN30 has had an average return of 11.5%/year, outperforming the 8.7% of VN-Index and 5.3% of HNX-Index, demonstrating the strong position of industry-leading companies.
According to Q1/2024 trading data from Pocket Option, the 10 highest liquidity stocks on HOSE including STB, VPB, MBB, TCB, HPG, SSI, VND, VNM, FPT, and MSN account for 43% of total market trading volume. This data is an important basis for investors when building short-term trading strategies, especially in selecting stocks that can quickly exit positions.
How to Effectively Evaluate Common Stocks in the Vietnamese Market
Evaluating common stocks in Vietnam requires a comprehensive approach, combining quantitative analysis, qualitative analysis, and market-specific factors. Below is a practical approach that has been tested through many market cycles in Vietnam from 2018-2024.
Fundamental Analysis should focus on important financial indicators adjusted for industry specifics in Vietnam:
- P/E: In Vietnam, reasonable P/E ranges from 10-15 for manufacturing, 7-12 for construction, 15-20 for technology, and 8-12 for banking (Q1/2024)
- P/B: Especially important for banking (good level: 1-1.8) and real estate (good level: 0.8-1.5)
- ROE: Leading Vietnamese businesses maintain ROE >15%, with banking sector reaching 18-24%, retail 25-30%, technology 22-28%
- Revenue and Net Profit Growth: Compared to GDP growth rate (6.5-7%)
- Debt/Equity: Safe level in Vietnam is <1 for manufacturing, <2.5 for real estate
| Industry | Reasonable P/E (2024) | Average ROE | Dividend Ratio |
|---|---|---|---|
| Banking | 8-12 | 18-24% | 6-8% (cash + stock) |
| Real Estate | 10-15 | 14-18% | 3-5% (unstable) |
| Retail | 12-18 | 25-30% | 4-6% (stable) |
| Electricity/Water | 9-14 | 12-15% | 7-9% (high stability) |
| Technology | 15-20 | 22-28% | 2-4% (+ high growth) |
A specific factor in evaluating Vietnamese stocks is ownership structure analysis. Statistics from 300 large listed companies show that: companies with foreign ownership >30% typically have more transparent governance; private businesses have ROE 5.7 percentage points higher than state-owned enterprises; and businesses with management owning >10% of shares typically performed 7.3% better during 2018-2023.
Experts from Pocket Option recommend: "When evaluating Vietnamese stocks, investors need to carefully analyze the latest quarterly financial reports, pay attention to strong fluctuations in revenue/profit between quarters, and cross-check with CAPEX and operating cash flow to detect abnormalities that may affect long-term performance."
Effective Technical Analysis in the Vietnamese Market
Technical analysis in the Vietnamese market needs to be adjusted to account for lower liquidity and stronger fluctuations. Data from 2018-2024 shows some technical patterns that work particularly well:
- RSI: Overbought/oversold thresholds in Vietnam are typically 75/25 instead of 70/30 as in developed markets, due to stronger volatility
- MACD: Signal line crossover from below combined with volume increasing 150% compared to 20-session average has a 78.3% success rate in the 2020-2024 period
- Trading Volume: Sudden increase (>200% of 20-session average) with Hammer/Inverted Hammer candles signals reversal with 72.1% accuracy on VN30
- MA Lines: Crossover of MA20 and MA50 effective with VN30, while MA10 and MA20 are more suitable for Mid Cap
- Candlestick Patterns: Evening/Morning Star and Bearish/Bullish Engulfing have >65% accuracy when appearing at important support/resistance zones
Technical analysis is particularly effective with VN30 stocks and high-liquidity Mid Cap group. Data from Pocket Option shows that technical patterns such as "Head and Shoulders," "Cup with Handle," and "Double Bottom" have a 67-73% success rate in the Vietnamese market when volume confirms, higher than the average success rate of 55-60% in other Asian markets.
Effective Common Stock Investment Strategies in Vietnam
Common stocks in Vietnam require distinct investment strategies, suitable for emerging market characteristics. Below are 5 specific strategies that have been tested in the Vietnamese market during 2018-2024, with actual performance achieved.
| Strategy | Actual Performance (2018-2023) | Representative Stocks | Suitability Level |
|---|---|---|---|
| Value Investing | 14.8%/year (after trading fees) | MWG, VCS, PHR, DGC, MBB | Long-term investors, capital >300 million |
| Growth Investing | 21.7%/year (high volatility) | FPT, VHM, ACB, VNM, HPG | 2-5 year investors, capital >500 million |
| Dividend Investing | 10.2%/year (most stable) | VCB, REE, NT2, GAS, POW | Safety-oriented investors, regular income |
| Trend Trading | 32.6%/year (calculated on trading capital) | STB, HPG, SSI, VPB, TCB | Professional traders, >4h/day |
| Sector Rotation | 24.3%/year (2020-2023) | Banking → Real Estate → Securities → Retail | Investors with knowledge of economic cycles |
Value investing strategy is particularly effective in Vietnam when focusing on businesses with P/E 30-40% lower than industry average, ROE >15%, dividend yield >5%, and stable growth. Industries like electricity, seaports, and pharmaceuticals such as REE, GMD, and DHG have delivered an average return of 14.8%/year during 2018-2023 for value investors.
Growth investing in Vietnam should target companies with profit growth rates >25%/year, continuously increasing market share, and operating in industries with long-term prospects such as technology, digital banking, and logistics. Data from Pocket Option shows that a portfolio of the 10 strongest growth stocks each year has generated returns of 21.7%/year over the 5-year period, far exceeding the VN-Index by 8.5 percentage points.
A characteristic of Vietnamese common stocks is strong cyclicality. Analysis of the past 15 years shows the market undergoes up-down cycles lasting an average of 28 months, with upward amplitude of 75-120% and downward of 30-45%. Asset allocation strategy according to cycles has proven effective, with increasing stock proportion when VN-Index drops to P/E 10-12 and decreasing when P/E exceeds 16-18.
Portfolio Allocation Strategy by Market Capitalization
Portfolio allocation by market capitalization needs to be adjusted according to investment objectives and age. Below are 4 effective allocation models in practice in Vietnam:
- Preservation Portfolio (55-65 years): 70% Large Cap, 20% Mid Cap, 10% cash - Average return 9.3%/year (2018-2023)
- Balanced Portfolio (40-55 years): 50% Large Cap, 35% Mid Cap, 10% Small Cap, 5% cash - Return 12.6%/year
- Growth Portfolio (30-40 years): 35% Large Cap, 40% Mid Cap, 20% Small Cap, 5% cash - Return 16.2%/year
- Aggressive Portfolio (25-35 years): 25% Large Cap, 35% Mid Cap, 35% Small Cap, 5% cash - Return 19.8%/year but strong volatility
According to Pocket Option's analysis, foreign institutional investors focus on VN30 with an average ownership rate of 31.7%, while domestic individual investors typically dominate in the Mid and Small Cap groups (>85% ownership rate). A survey of 1,500 successful individual investors in Vietnam shows that 67% have portfolio allocations at "growth" or "aggressive" levels and regularly rebalance their portfolios quarterly.
Risks of Common Stock Investment in Vietnam and Prevention Methods
Investing in common stocks in Vietnam harbors many specific risks that need to be identified and prevented. Below is a detailed analysis of 5 main risks and effective responses, based on actual data from 2018-2024.
| Risk Type | Severity Level | Specific Prevention Measures | Measure Effectiveness |
|---|---|---|---|
| Liquidity Risk | High (98% of stocks outside VN30 have low liquidity) | Limit maximum 2% capital/code for Small Cap; 5% for Mid Cap | Reduces risk of getting stuck by 72% when market adjusts |
| Price Manipulation Risk | Medium-High (25 penalty cases in 2023) | Avoid stocks rising >25% in 10 sessions without good news; abnormal price-volume movements | Avoided 83% of detected manipulation cases |
| Non-transparent Financial Statement Risk | Medium (16% of companies required to review financial statements) | Analyze operating cash flow vs. Profit; inventory fluctuations; receivables | Detected 76% of cases of "beautifying" financial statements |
| Policy Risk | Medium (strong impact on Real Estate, Banking) | Allocate capital to >6 industries; update policy news daily | Reduced impact from sudden policy changes by 45% |
| Exchange Rate/Interest Rate Risk | Low-Medium (VND depreciates 2-3%/year) | Balance portfolio between groups benefiting from and disadvantaged by rising exchange rates | Neutralize impact, even profit from fluctuations |
Liquidity risk is the biggest challenge in Vietnam. March 2024 analysis shows that besides the 50 highest liquidity stocks, the remaining codes have an average trading volume of only 283,000 shares/day, making it difficult to exit positions when the market fluctuates strongly. An effective strategy is to analyze ADTV (Average Daily Trading Volume) for 30 days and not invest more than 10% of ADTV for each code.
Experts from Pocket Option recommend investors apply the "7-15-25" capital management rule: no more than 7% of total portfolio in one stock; cut losses when dropping 15% from purchase price; take profit when reaching 25% or when strong reversal signals appear. Backtest analysis from 2015-2023 shows this strategy helps preserve 82% of capital during deep market decline periods (2018, 2020, 2022).
Another specific risk in Vietnam is the phenomenon of "price manipulation." Special Control by the Stock Exchange in 2023 identified 16 codes with signs of manipulation, mainly in the group with capitalization below 1,000 billion dong and prices below 15,000 dong/share. Recognition signs include: continuous price increase >15% in 5 sessions without good news; volume increasing suddenly >300% of 20-session average; insiders buying/selling in large volumes;
- Completely avoid stocks priced <5,000 dong/share with abnormal trading volume
- Check insider transactions before investing (HOSE and HNX publish weekly)
- Gradually reduce position when stock rises >30% in a month without fundamental changes
- Monitor foreign ownership ratio - when they consistently sell for >10 sessions is a warning sign
- Always set automatic stop-loss orders, especially with small and highly volatile stocks
Data from Pocket Option also shows the high effectiveness of industry diversification strategy. Analysis from 2020-2023 points out that a portfolio allocating 10% evenly across 10 different industries reduced volatility by 42% compared to portfolios concentrated in 3-4 industries, while minimizing risk from sudden policy changes, as happened with the real estate industry in 2022 or banking in 2023.
Development Trends of the Common Stock Market in Vietnam
Vietnam's stock market is in a rapid development phase, with many important trends that will shape the investment future during 2024-2028. Understanding these trends helps investors effectively position long-term strategies.
Market upgrade is the most strategic trend. Currently, FTSE has included Vietnam in the watchlist for upgrading from frontier to emerging since 2018, and MSCI has been evaluating since June 2023. According to the State Securities Commission's roadmap, Vietnam is implementing 10 criteria to be upgraded in 2025-2026, including: improving market access, T+2 clearing settlement (already implemented) moving towards T+1 (2026), deploying the KRX system and enhancing investor protection.
| Trend | Current Status (2024) | Forecast 2025-2027 | Impact on Investors |
|---|---|---|---|
| Market Upgrade | Frontier - On FTSE's watchlist | High probability of upgrade to Emerging Market in 2026 | Foreign capital inflow of 5-7 billion USD, average P/E increases by 2-3 points |
| Trading Digitalization | KRX Phase 1, T+2, 57% of investors trade online | KRX Phase 2, T+1 (2026), 85% digital trading, blockchain implementation | 60% faster trading, fees reduced by 25-30%, increased transparency |
| Investment Products | ETF (23 funds), covered warrants (68 codes), futures | Smart ETFs, ESG ETFs, sector ETFs, structured products | Diverse choices, more efficient asset allocation |
| Market Size | 5.8 million accounts (5.9% of population), capitalization 238 billion USD (~55% GDP) | 9-10 million accounts (9.5%), capitalization 350-400 billion USD (80-85% GDP) | Liquidity increases 65-80%, reduces sudden volatility |
| ESG Trend | 23% of listed companies apply ESG standards | Mandatory ESG reporting for VN100 from 2025, >60% of listed companies apply | New investment opportunities in sustainable businesses |
From Pocket Option's analysis, the digitalization process is creating fundamental changes with order processing time reduced from 15-20 seconds to 3-5 seconds, successful order matching rate increased by 23%, and transaction costs reduced by 15% from 2020-2024. By 2026, it is estimated that 85% of individual investors will trade via mobile platforms, and blockchain technology will be applied to enhance information transparency.
The ESG (Environmental, Social, Governance) trend is becoming a focus in Vietnam. According to the State Securities Commission's roadmap, from 2025 companies in VN100 must have ESG reports, and by 2027 this will be extended to all listed companies. Market data from 2022-2023 shows that 33 companies applying ESG best practices have outperformed the VN-Index by 7.2% and have foreign ownership rates 18.5% higher.
Regarding the characteristics of common stocks in Vietnam, major changes are forecasted in the next 3-5 years:
- More stable price volatility, with average amplitude decreasing from 2.3% to 1.7-1.8%/day
- Strong increase in liquidity, especially in the Mid Cap group (expected to increase 75-90%)
- Significantly improved information transparency, with 78% of listed companies applying IFRS standards by 2027
- Foreign ownership rate expected to increase from current 21.5% to 32-35% by 2027
- Correlation with regional and global markets increasing to 0.65-0.7 (from current 0.48)
With these positive trends, common stocks in Vietnam will become an increasingly attractive, standardized, and less risky investment channel. However, investors still need to be cautious, continuously update knowledge, and adjust strategies to optimize investment performance in an ever-changing environment.
Conclusion
Common stocks in Vietnam are strongly transforming from a volatile frontier market to a more professional and attractive investment environment. With projected GDP growth rates maintained at 6.5-7.3% during 2024-2026, the stock market will continue to benefit from stable macroeconomic foundations and domestic and foreign investment flows.
Successful investment in common stocks in Vietnam requires investors to understand the characteristics of common stocks in this market - from concentrated ownership structure to liquidity and specific valuation factors. Factors such as lower P/E compared to the region (14.8 compared to 17.2 in Thailand and 18.5 in Indonesia) along with high growth prospects create great opportunities for long-term investors.
Based on industry analysis, sectors such as digital banking, technology, logistics, retail, and electronic component manufacturing are forecast to lead the market during 2024-2027, with average profit growth rates of 18-25%/year. In particular, businesses benefiting from supply chain shift trends and FDI into Vietnam such as KBC, IDC, DPM, DGC have superior growth potential.
Experts from Pocket Option recommend: "Investing in Vietnamese stocks during 2024-2027 should focus on businesses with sustainable competitive advantages, transparent governance, and stable profit growth. Building a portfolio allocated according to the 40-40-20 model (Large Cap - Mid Cap - Cash) will optimize performance in current market conditions. Maintaining discipline in capital management with the '7-15-25' principle and quarterly portfolio rebalancing will effectively protect capital during volatile periods."
As the Vietnamese market moves closer to the upgrade target in 2025-2026, investors who seize the opportunity early will benefit from the expected foreign capital inflow of 5-7 billion USD after the upgrade. This will push valuations up 15-20% and improve liquidity across the market. A "buy and hold" strategy with leading bluechips during this period could deliver superior returns compared to traditional investment channels such as real estate or bank savings.