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Just three years ago, Vietnam was still a figure in the global financial system. The Southeast Asian nation had only ten publicly traded companies of one billion US dollars, while the daily trading volume on the stock market was about 100 million US dollars.
This image is however very different today. It's not quite Wall Street, but the country's financial center, Ho Chi Minh, is warming up fast.
Vietnam 's benchmark reached a 10 – year high last year with a gain of 47%. In 1965, the Ho Chi Minh City Stock Exchange jumped 75.2 percent to 115.46 billion US dollars, according to annual statistics from the World Federation of Exchanges (WFE). ). The number of listed companies valued at more than $ 1 billion as well as the volume of daily transactions have tripled.
"Investors have been drawn to the growth and stability of Vietnam," said Barry Weisblatt, director of research at Viet Capital Securities. A phenomenal growth in Vietnam – Maybank Kim Eng The regional research economist Chua Hak Bin nicknamed the economy "a rock star" – is only a glimpse of the Association Nations of Southeast Asia »(19659002) (Asean) Capital Markets in full swing
Increasingly large and sophisticated, markets like Indonesia and Thailand are calling into question the status quo.
A New Order
For two decades, Singapore has been the undisputed regional champion. Asean companies looking for a listing have considered the lion city as the first choice, especially given the republic's exposure to international investors.
But things are changing fast, economies such as Indonesia, Thailand, and the Philippines are looking to dethrone Singapore.
With a market capitalization of $ 787.28 billion last year, Singapore was the 16th largest stock market in the Asia-Pacific region.
But its growth was tasteless compared to others in the region. The WFE figures show that the market capitalization of the Singapore Stock Exchange (SGX) has increased by 13.6% compared to 2016, against 37.3% in Hong Kong.
In Southeast Asia, the Ho Chi Minh City Stock Exchange jumped 75.2%. Indonesia (22.6%), the Philippines (22%), Thailand (15.7%) and Malaysia (14.5%).
The SGX has suffered in recent years from a decrease in the number of IPOs, from
to an even bigger bubble on the Chinese stock market
For the first quarter of 2018 the average daily value of the stock market was S $ 1.45 billion (US $ 1 billion), compared to the daily average. market value of $ 2 billion in Thailand, Asean's most liquid market
Regional stock exchanges have been more successful in attracting new listings, especially national companies.
Vietnam recorded the largest number of the first According to data compiled by EY, six transactions were completed this year. The communist country has more in tow; he has targeted IPOs for a total of 64 state-owned companies this year, including telecom firm MobiFone, and another 18 in 2019.
Indonesia has registered the largest number transactions at 19, with proceeds of $ 700 million. has attracted seven IPOs in the first half of 2018, with $ 400 million raised, mainly through the IPO of Chinese operator Sasseur Reit
Max Loh, managing partner of EY for Asean and Singapore, note that it is natural most ads outside of Singapore come from local names. "There is a good knowledge of the brand, the business and the market, all other things being equal, companies tend to subscribe to their stock exchanges – unlike what happened before, when their financial markets were less developed and that the SGX was the clearest choice. "
Is Southeast Asia the Next Silicon Valley?
In fact, Indonesia has already declared its intention to challenge Singapore.He attempted to attract local companies listed in the Lion City to become public in Jakarta, as well as foreign companies operating in his country.The Indonesia Stock Exchange (IDX) also wants to increase its offers, local exchange traded funds to derivatives, and replace the SGX as the best dog of Asean by 2020.
Fighting back
But Singapore do not give up without fighting.
Marc he fellow of the state of the city eclipses yet the other regional stock exchanges and remains an international financial center.
Robson Lee, a partner with the law firm Gibson Dunn, notes that SGX also has an excellent reputation for transparency, governance, and the enforcement of its securities laws and rating rules. to the other Asean countries
"But that would not be an insurmountable threshold for other asean stock markets – the SGX ran for its money in the coming time." The SGX should not be rest on its laurels, "Lee said.
That said, Singapore will continue, in the short term, to play a key and relevant role even if the landscape changes.
Focusing on technology stocks, which many view as the future of the economy. The SGX has recently announced its willingness to allow a two-class structure, used by large technology companies such as Facebook and Alphabet, formerly known as Google. "Singapore will continue to be the regional center for a while, especially after allowing the new two-class share structure for certain types of IPOs," said Romaine Jackson, chief of Asia. Southeast of Dealogic
.
This could, in turn, attract Chinese names led by techno-asean entrepreneurs and unicorns that have not yet been listed.
"It will be interesting where a name like Go-jek [a ride-sharing start-up comparable to Uber] in Indonesia decides to register in the future," Jackson said.
In the long term, market observers believe that the future could be based on collaboration rather than competition. On the economic side, Asean is trying to evolve towards a common market with free movement of goods, capital and people, so it would be logical that the markets are also integrated.
Lee Lee of Gibson Dunn believes that a more sustainable move would be to develop a pan-Asian stock market. This means the installation of a more unified capital market with rules and registration rules comparable in each country, which would allow international investors to trade throughout the region. courtesy Morning Post in South China
Posted in Daily Times, July 30 th 2018.
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