Marketing plan for the development of ho chi minh city stock exchange in the period of 2012 2017 in vietnam stock market

TRƯỜNG ĐẠI HỌC MỞ TP. HCM
HO CHI MINH CITY OPEN UNIVERSITY

UNIVERSITEÙ LIBRE DE BRUXELLES
SOLVAY BRUSSELS SCHOOL

MBMM5

ĐẶNG KIM THỦY

MARKETING PLAN FOR THE DEVELOPMENT OF HOCHIMINH
STOCK EXCHANGE IN THE PERIOD OF 2012 - 2017
IN VIETNAM STOCK MARKET

MASTER PROJECT
MASTER IN BUSINESS & MARKETING MANAGEMENT

Tutor’s Name: TRAN HA MINH QUAN. PhD

Ho Chi Minh City
(2012)


STATEMENT OF ORIGINALITY
This work has not been submitted for a degree or diploma in any university. To the best of
my knowledge and belief, the project contains no materials previously published or written
by another person except where due reference is made in the project itself.

Dang Kim Thuy
February 19, 2012

ACKNOWLEDGEMENT
I would like to express my appreciation to Mr. Tran Ha Minh Quan - PhD, my project tutor,
for all support in giving the valued guidance and useful advises in the preparation of this
project.
In addition, I would like to say thanks to Prof. Jean-Pierre Baeyens – the Dean of Solvay
Business School in Vietnam for kind supports in MBMM5 Course as well as my final
project.
Special thanks to Mr. Trinh Trung Nghia – Manager of Trading Surveillance Department
of Hochiminh Stock Exchange, my mentor, for unlimited support in sharing information
and experiences in my project.
Finally, I would like to send my science appreciation to my family and my company for
supports and encouragements during my MBMM5 course.


TUTOR’S COMMENTS
I am writing to confirm that the project:
“MARKETING PLAN FOR THE DEVELOPMENT OF HOCHIMINH STOCK
EXCHANGE IN THE PERIOD OF 2012 - 2017 IN VIETNAM STOCK MARKET”
Prepared by Ms. Dang Kim Thuy

This project has satisfied the requirement for Master in Business and Marketing
Management course.
I, therefore, recommend that the project be presented.

Tutor

TRAN HA MINH QUAN

Name: Dang Kim Thuy
Course: MBMM5
COMPANY’S COMMENTS
Hochiminh Stock Exchange had the development strategies in the period 2011-2020.
However, Hochiminh Stock Exchange has not made marketing strategies plans yet. When
Ms. Dang Kim Thuy would like to ask me about this issue, I accepted her requirement and
gave the opportunity for her. From the development strategies of Hochiminh Stock
Exchange, she finds the issues and gets marketing objectives in her mind to make
marketing plan in the next 5 years (2012-2017). In the project, she uses market research
with in-depth interview method focus on some kind of interviewees including investors,
brokers, analysts, experts of financial field. She wants to analyze the attitudes, opinions,
expectations of interviewees about the Vietnam stock market as well as Hochiminh Stock
Exchange. From that, she gives the detailed marketing strategies plan for Hochiminh Stock
Exchange. In addition, she has some good recommendations for us from interesting
aspects in the Vietnamese investors’ attitude.

Trinh Trung Nghia
Manager of Trading Surveillance Department


TABLE OF CONTENTS
EXECUTIVE SUMMARY ................................................................................................... 1 
I. LITERATURE REVIEW................................................................................................ 3 
II. VIETNAM STOCK MARKET OVERVIEW ............................................................... 5 
2.1 Vietnam stock market ................................................................................................. 5 
2.2 Hochiminh Stock Exchange (HOSE) ........................................................................... 6 
III. THE DEVELOPMENT STRATEGIES OF HOCHIMINH STOCK EXCHANGE . 7 
3.1 Business Objectives .................................................................................................... 8 
3.2 Business Strategies ..................................................................................................... 8 
IV. MARKETING OBJECTIVES .................................................................................. 9 

V. MARKET RESEARCH ANALYSIS ............................................................................. 9 
5.1 Reasons to Research ................................................................................................... 9 
5.2 Purpose of Research.................................................................................................. 10 
5.3 Research Methodology ............................................................................................. 11 
VI. RESEARCH DESIGN ................................................................................................ 11 
6.1 Framework of Research ............................................................................................ 11 
6.2 Methodology ............................................................................................................. 11 
6.3 Information Need ...................................................................................................... 12 
VII. RESULT OF RESEARCH ........................................................................................ 13 
VIII. TARGET SEGMENT .............................................................................................. 16 
8.1 Vietnamese enterprises ............................................................................................ 16 
8.2 Listed companies ...................................................................................................... 17 
8.3 Investors ................................................................................................................... 18 
8.4 Partners..................................................................................................................... 19 
IX. MARKETING ACTIVITIES PLAN .......................................................................... 20 
9.1 Products and services ............................................................................................... 20 
9.1.1 Products: ........................................................................................................... 21 
9.1.2 Services: ............................................................................................................ 21 
9.2 Price.......................................................................................................................... 22 
9.3 Place (distribution channel) ...................................................................................... 22 
9.4 Promotion ................................................................................................................. 23 
9.5 Communication......................................................................................................... 23 
9.6 Estimate Budget ....................................................................................................... 26 
X. CONCLUSION AND RECOMMENDATION ............................................................ 29 
XI. REFERENCE.............................................................................................................. 30 
XII. APPENDIX ................................................................................................................ 32 
Appendix 1: Conception ................................................................................................. 32 
Appendix 2: Explaination of each activity ..................................................................... 33 
Appendix 3: Macro and Micro Environment of Hochiminh Stock Exchange ............... 35 
Appendix 4: Questionnaire survey ................................................................................. 50 

ABBREVIATION
HOSE: Hochiminh Stock Exchange
SSC: State Securities Commission
MOF: Ministry of Finance
VSD: Vietnam Securities Depository
HNX: Hanoi Stock Exchange
IPO: Initial Public Offer
OTC: Over the counter
WTO: The World Trade Organization
IT: Information Technology
WFE: The World Federation of Exchange
AOSEF: Asian and Oceanian Stock Exchange of Federation
ASEAN CEO meeting: CEOs ASEAN Stock Exchange Meeting
KRX: Korea Exchange
TSE: Tokyo Stock Exchange
MP: Market Order
ETFs: Exchange Trade Funds
REIT: Real estate investment trust
MOU: The Memorandum of Understanding


1

EXECUTIVE SUMMARY
Vietnam stock market is one of the potential markets with growing and receiving
great attention from investors to the government because it has an important role in raising
capital. Besides, it also provides an environment for public investment and helps the
government implement macroeconomic policy. As a "thermometer" of the economy, stock

market has shown a positive trend. Based on the VN-Index, the stock market seemed not
to be bright in the region but it has left a strong impression in terms of capital channel of
financial market.
Hochiminh

Stock

Exchange

(HOSE) has seen vigorously moving
from state-owned company to a limited
company with full functionality as an
Exchange under the international rules.
This is a major turning-point in the
operation of HOSE; create a stepping
to improve its position in the process of
integration with the international stock

Source from HOSE: VN Index 2011

market. However, these reforms have been implemented by HOSE still to do and not
enough powerful yet to push HOSE up to enter into the world.
Year 2011 was a difficult year for Vietnam stock market in particular and the world
in general. The global crisis and the increase of inflation of Vietnam have caused many
uncertainties lead to influence market participants. The VN Index lost 26.5%, average
trading down nearly 28.3% in volume and 55.3% in value compared with year 2010. Poor
market liquidity has caused leading to decline the revenue of securities companies, the
number of securities companies lost nearly 80% of total number of securities on the
market. In addition, HOSE is gearing up to adjust the current transaction time in
transaction management project. This project is extending trading time into afternoon,

2

deploying to open market order (MP) after approval from the State Securities Commission,
to continue to participate in building the new HOSE-Index.
Built on the development of HOSE to fit the real conditions and orientation of the
government in the stock market, the strategy revolves around problems and the operation
in the stock market such as the goods-services, technology infrastructure, the needs of the
market participants, competitiveness and international integration in the period from 2012
- 2017. The year 2012 is the next stage for Vietnam economy in 2011-2020 with the
objective of sustainable development proposed in The 11th Vietnam Communist Party
Congress. It is likely that challenges will remain for stock market. However, HOSE with
the endeavor and the solidarity of all staff will surely overcome challenges to make stock
market fair, reliable and transparent, performing its crucial role in the national economy.
In the coming stage with many challenges and opportunities, with a determination to
grow sustainably based on international standards and practices, HOSE had the
development strategies in period 2011-2020 and submitted to State Securities Commission.
HOSE will continue its strategic goals to modernize the infrastructure and technology as
well as diversify products and services for the market. The overall strategy is the basis for
HOSE’s department to build a marketing strategy to match the orientation development
and it is also the basis of implementation evaluation results in every phases.
Since then, build a marketing strategy for promoting HOSE’s development and
increase more powerful into Vietnam stock market as well as the world stock market.
HOSE will continue its role in organizing the bourse safely, publicly, fairly and
transparently, and being an effective fund mobilizing channel for the country’s economy to
attract local and institution investors.


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I. LITERATURE REVIEW
There are many definitions of Marketing as The Chartered Institute of Marketing
defines marketing is “The management process responsible for identifying, anticipating and
satisfying customer requirements profitably”. Or, Philip Kotler defines marketing as
“satisfying needs and wants through an exchange process”. P.Tailor of the website of
learnmarketing suggests that “Marketing is not about providing products or services it is
essentially about providing changing benefits to the changing needs and demands of the
customer”(What is Marketing?).

In summary, Marketing is seen as task of creating,

promoting and delivering products and services with the best benefit to customers and
business. To satisfy customers, they must make marketing plan following the business
objectives and strategies. Marketing plan outlines the specific actions the company intends
to attract potential customers in order to persuade customers to use products and services
the company offer. Before to make marketing plan, the company always must need to
have market research for collecting and analyzing of information about customers or
competitors or the effectiveness of marketing programs so that the company can define
what the customers want and need. There are two types of market research as:


Primary research (also known as field research such as experts and actors,
observation, market tests, market survey), which relate to research for a specific
purpose. In marketing, the term “primary research” has types of primary data
collection methods including in-depth interview and discussion focus groups.



Secondary research (also referred to as desk research such as government, trade

associations, press, annual reports, private surveys), initially conducted for one
purpose, but often used to support another purpose or end goal.
The appropriateness of each research depends on whether data can be quantified
(quantitative research), or whether subjective, non-numeric or abstract concepts are
required to be researched (qualitative research). (Marketing, Wekipedia)


4

After market research analysis, the company will start marketing activities plan
through marketing mix- is a business tool used in marketing products including 4Ps such as
products/services, price, place (distribution) and promotion.
-

Products: is often used as a good or service that most closely meets the
requirements of particular market or segment.

-

Price: In general terms, price is the quantity of payment between two parties and
refers given by one party (buyers) to another (sellers) in return for goods or
services.

-

Place (Distribution Channel): in the stock market, the term “distribution channel” is
the path movement of products and services from the businesses to customers.

-

Promotion: in marketing, the term “promotion” is as form of communication that
the company uses various multimedia methods to focus on a targeted segment in
order to reach specific marketing objectives.

The project will build the detailed 5 years marketing plan for the development of
HOSE in Vietnam Stock Market. HOSE is an agency of the central securities market in
Vietnam. So HOSE has no competition not like as other businesses. However, in order to
be able to stand firm in the management of listed companies and securities companies in
the stock market, HOSE must endeavor to promote participants market more for raising
the capital and the liquidity as well as particularly attracting investors and foreign
institutions participate in the market. HOSE had the development strategies of stock
market from 2011 – 2020 after presented to the State Securities Commission (SSC).
Vietnam stock market is still young so it somewhat difficult and was affected by the
global financial markets. In addition, information disclosure appeared the listed companies
and securities companies give inaccurate information to make the loss of investor’s belief
and lead to investors no longer spend the money invested. They moved to invest gold,
deposit with high interest rates and led to the VN index of Vietnam stock market slumped
sharply. Therefore, this project will analyze the understanding of market and the desired


5

requirements of individual investors, securities companies as well as experts in the field of
financial securities to gather information how investors expect Vietnam stock market or
why investors do not hope to participate in Vietnam stock market. This analysis is based
on market research following in-depth personal interview method to get the quality for the
thesis. After analysis, the project will give market objectives and market strategy plan for
marketing as well as communication of HOSE in the period 2012 - 2017.

II. VIETNAM STOCK MARKET OVERVIEW

2.1 Vietnam stock market
In Vietnam, there are two stock exchange (Hochiminh Stock Exchange and Hanoi
Stock Exchange) and Vietnam Securities Depository (VSD). They are directly under by
Ministry of Finance and they are also supposed to report State Securities Commission
(SSC) such as trading surveillance, information dissemination and so on. Hanoi Stock
Exchange (HNX) manages bonds and OTC. HNX also manages listed companies with
paid-up capital 10 billion VND. Hochiminh Stock Exchange (HOSE) operates securities
trading and manages blue chip with paid-up capital over 80 billion VND and fund
certificates. The Vietnam Securities Depository Center (VSD) following missions:
supporting works after trading such as depository, registration and clearing and settlement
of securities in running the entire system; helping authorities in doing market surveillance
more effectively and controlling capital flow.


6

Vietnam Stock Market fluctuated dramatically in 2011 due to harsh influence from
both domestic and overseas economics. In the last days of 2011, the stock market went
down steadily with HNX-Index at 56 points (on 27 December 2011) and decreased 50%
compare with the peak of points in the year. VN-Index recorded the low at the 347.80
points (on 27 December 2011) and decreased 34% from the peak of points in the year.
About the scale of market transactions in the year, the total volume of securities traded
on the Hochiminh Stock Exchange (HOSE) reached 8,303 million shares units, worth VND
160,395 billion and in Hanoi Stock Exchange (HNX) were 7,944 million shares units,
worth VND 95,847 billion respectively. (Linh Chi, 2011)

2.2 Hochiminh Stock Exchange (HOSE)
On July 10th 1998, the Prime Minister signed Decree No. 48/1998/ND-CP on stock and
securities market and a Decision to set up two (02) securities trading centers at Hanoi and
Ho Chi Minh City. Hochiminh Stock Exchange was formerly called Ho Chi Minh City

Securities Trading Center and is the first central stock market of Vietnam. On July 20th
2000, the Ho Chi Minh City Securities Trading Center was officially put into operation and
executed the first trading session on July 28th 2000 with 2 types of listing stocks. After 7
years of growing and integrating into the global securities market, the government signed
Decision No. 599/QD-TTg on May 11th 2007 to transfer the Ho Chi Minh City Securities
Trading Center to Hochiminh Stock Exchange (HOSE). On August 8th 2007, Hochiminh
Stock Exchange was officially opened and run as a limited company with 100% state
owned capital by Ministry of Finance.
Hochiminh Stock Exchange has always been the pioneer in the field of organizing
transactions, listing management, information disclosure, trading surveillance, particularly
investment in technological infrastructure development and research and development of
new products. Over 11 years of operation, HOSE has built a solid foundation for
development. HOSE is an equity market of large companies with the size and trading


7

volume steadily increased over the years. As of 31 December 2011, there were 301 stocks,
5 funds certificates, and 47 bonds listed and traded on HOSE with the total nominal listing
value of VND 203,066 billion, increasing 18.2% compared to year 2010. The listed
companies decrease the revenue and profit steadily due to difficulties to find the capital
and exchange rate fluctuation. HOSE currently has 102 member firms and more than
1.200.000 investor accounts in domestic and foreign. Auction activities is quite with 05
auctions were hold successfully in 2011. The total value of the auction revenue is VND
448 billion, down 58% over the same period in 2010. (Report 2011 of HOSE)
The brand name and position of HOSE increasingly confirmed in the process of
integration with the region and the world through cooperation and sign several MOU with
stock exchanges for the fields of technical support, training, information exchange and
cross-listed. The brand name and position of HOSE increasingly confirmed in the process
of integration with the region and the world through cooperation and sign several MOU

with stock exchanges for the fields of technical support, training, information exchange
and cross-listed. Especially joined ASEAN Linkage with 6 ASEAN Stock Exchanges in the
region, joined the Asian and Oceania Stock Exchange Federation (AOSEF) and the World
Federation of Exchange (WFE) marks the full integration of the HOSE on global financial
markets.

III. THE DEVELOPMENT STRATEGIES OF HOCHIMINH STOCK EXCHANGE
Stock market is a long-term capital market and HOSE always plays an important
role in the economy because it is a channel to raise capital efficiently in business activities
and provide the stability and development to economy. Therefore, in the strategy of socioeconomic development of the country in 2001-2010 and the project for development of
Vietnam capital market up in 2010 and vision in 2020, the Government has been
particularly concerned to stock market.


8

Compared to the other organization unit in the country, HOSE has no competitive
pressure in the business activities environment. However, HOSE does not only stop the
centralized management of listed companies and securities firms in the market but also
want to create a brand name in the region as well as in the world and attract investors,
institutes participate in Vietnam's stock market to raise capital as well as the liquidity of
the market. Thus, HOSE had plans and objectives to develop the strategies for Vietnam
stock market from 2011 – 2020 as follows:

3.1 Business Objectives


With the leader position in the securities industry, HOSE has ambitions to become a
strong and sustainable organization based on international standards and organize the
stock market transparency, safety and efficiency.



Affirming the level brand in the region and international and diversify the high quality
of products and services.



Improving modern technology infrastructure and meet international standards in the
transaction, listing, supervision, information disclosure and other activities...



"To accomplish the goal, HOSE needs support from many sides including in particular
the consensus of market participants"

3.2 Business Strategies
Period of 2011 - 2015
–

Increase the number of listed companies reached about 400-500 companies and market
capitalization value stocks reach 60-70% of GDP

–

Improve the organizational structure and establish corporate governance system
according to the international standard

–

Improve modern IT infrastructure, automation trading, trading surveillance,
information dissemination systems.


9

–

Improve the quality of human resources on par with the ASEAN Stock Exchange

Period of 2016 - 2020
–

Increase the number of listed companies reached about 600-700 companies and market
capitalization value stocks reach 80-90% of GDP

–

Connect trading entirely with the ASEAN Linkage which allows domestic and foreign
investors to make cross-border transactions

–

Enhance the quality of products and services and continue to diversify new products for
the current segment

–

Conduct to equitize HOSE and establish many companies joint venture in order to
provide services to the stock market

IV. MARKETING OBJECTIVES
 Increasing local and foreign investors’ awareness in the Vietnam stock market
 Attract new businesses equitize and list on HOSE to raise the capital
 Launch new products: ETFs, derivatives in next 5 years

V. MARKET RESEARCH ANALYSIS
5.1 Reasons to Research
The year’s market performance shows that the attraction generated by increasing listed
securities has no longer been a great contribution to improving the market liquidity. Also,
the attraction that the market benefited from the economic growth was overwhelmed by
specific obstacles faced by the economy, e.g. inflation and monetary policies. The fact that
what used to be the attractive characteristics of the market are now fading, has presented a
new challenge for maintaining the market appeal. In order to develop further and enhance
international competitiveness, the market needs new impulses: market structure needs to
be revised; trading barriers need to be removed; and advanced services and practices need
to be launched, etc. Especially, HOSE had the development strategies from the period


10

2011-2020 and from that the project bases on the development strategies to make
marketing plan for the development of HOSE. Building a marketing strategy plan for
HOSE helps HOSE to create a good image and sound position in Vietnam and ASEAN
region. And attract market participants come back the Vietnam stock market

5.2 Purpose of Research
To building a marketing plan for HOSE, the project will collect and analyze as below:
Investors:


To know the level of investment and aware of Vietnam stock market



To get investor’s opinions if the Vietnam stock market go down in the future.



The ways which investors want HOSE will change strategies near future.



To get recommendation for investors’ opinion.



How investors expect Vietnam stock market

Securities companies (brokers or analyst experts)


To get opinion of experts about the Vietnam stock market



The key drivers to influence the Vietnam stock market



The key drivers will push Vietnam stock market upwards



To get recommendation from broker’s opinion



Should or should not deploy new products/services for Vietnam stock market



Assess IT’s system, transaction system in stock market (should or should not to
invest new solution package for IT system in the future)

Other sectors relate to stock market:


Elements of successful stock market



The benefits of stock market



The role of Hochiminh Stock Exchange



Reasons why Vietnam stock market went down.



How they want to expect HOSE in the future


11

5.3 Research Methodology
This thesis will use desk research for analyzes from secondary sources such as press,
annual reports, and government. And using field research with qualitative research method.
A depth interview is a qualitative research technique for person discussion. This technique
collects increased insight into interviewee's thoughts, attitudes, and assessment on
important issues of Vietnam stock market.

VI. RESEARCH DESIGN
6.1 Framework of Research
Step 1: Problem Statement
Step 2: Research Questions
Step 3: Methodology including Qualitative Research
Step 4: Data Collection
Step 5: Analysis
Step 6: Recommendations

6.2 Methodology
Depth interview is a qualitative research technique for person discussion. This
technique collects increased insight into interviewee's thoughts, attitudes, and assessment
on important issues of Vietnam stock market. The depth interview uses a flexible
interview approach. It aims to ask questions and use this technique to gather ideas, to

gather information, and to develop materials for the development of Hochiminh Stock
Exchange in Vietnam Stock Market in the future. Using 6 Focus Groups of respondents in
different types of interviewees who participant in Vietnam stock market. Focus groups
sample: recruited 10 respondent interviewees and divided into 6 groups. Respondents of
each group had the difference type of person participant in Vietnam stock market.


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- Group 01 – Investor: 2 persons
- Group 02 – Securities companies: 2 representative persons of Vietnam’ securities
companies and 1 foreign securities companies
- Group 03 – foreign stock exchange: 1 representative persons of Tokyo Stock Exchange
- Group 04 – Bank: 1 representative person of Japan Bank For International Cooperation
- Group 05 - Securities and Futures Institute (SFI) of Taiwan (Education Center)
- Group 06 - Interactive Data and Edaily-Seoul
Respondent interviewee criteria: those who have experience investment and
participant in Vietnam stock market during many years and they will give exact
information as well as identified the stock market.

6.3 Information Need
From the research, the thesis needed to find out:


To get opinions about the Vietnam stock market



To know the level of investment and aware of Vietnam stock market



The ways which investors hope HOSE will change strategies near future.



To get recommendation from interviewee’s opinion.



How interviewees expect Vietnam stock market



What kind of investment they want to invest if Vietnam stock market still going
down (gold, banking, real estate…)



The key drivers to influence the Vietnam stock market



The key drivers will push Vietnam stock market upwards



Should or should not deploy new products/services for Vietnam stock market



Assess IT’s system, transaction system in stock market (should or should not to
invest new solution package for IT system in the future)



The difficult of information dissemination of listed companies



Assess the information processing of HOSE


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VII. RESULT OF RESEARCH
Below are the findings of research results which help to understand the awareness
of market participants about Vietnam stock market as well as HOSE. From the findings of
research results and the development strategies of HOSE in period 2012 – 2017, the
project develop marketing plan for HOSE:

7.1 The benefits from stock market
Most of interviewees are from many kind of field in industry including economist,
brokers, individual investors, banks and reporters. They understand and have some
knowledge of stock market few years so they gave their opinions about the benefits of
stock market.
According to the evaluation of the benefits of the stock market, the increase of funds
for enterprises is a very important. The increase of funds helps companies to improve
capital allocation efficiency in production, enhance highly competitive industry and the
business image. Moreover, some investors think that the stock market also facilitate

individual investors are also very important. Helping individual investors is easy to access
into many investors for selecting the diversified portfolio of stocks at the many securities
companies. Stock investment is an attractive investment channel with high liquidity and
raising capital more easily according to the opinion of an expert from Japan Securities
Incorporated. In addition, the development of stock market is critical for the development
of financial market. Investing stocks is always associated with the banking system for the
depository. Some opinions think that benefits of the stock market also encourage the
transparency and it is extremely important for investors. When listed, companies have to
report and publish information and activities of the company for investors so that they can
capture the correct information in the market.


14

7.2 Elements of a successful stock market
Elements for success in Vietnam stock market are to have a regime of disclosure and
surveillance management timely and effectively. The equitization of state owned
enterprises has created momentum for the development of stock market is also very
important. Securities sector attracts to foreign investors through transparency and more
public. In addition, accessing WTO and the global of financial market are also the driving
force behind the growth of stock market. The market participants will have more
responsibilities and rights under international rules.

7.3 The reason - Vietnam stock market slumps down and slows growth
According to the opinion of investors, most of reasons of stock market slow growth
are the lack of transparent information from enterprises and the weak infrastructure is
somewhat important. The weak infrastructure leads to information disclosure system slow
to investors. Besides, Vietnam stock market still is young so the legal framework is
unclear and needs time to build it. In addition, there would not have many kind of product
for investors. Accessing WTO and the global of financial market also affects Vietnam

stock market. According to Mr. Kato – General Manager & Chief Representative of
Tokyo Stock Exchange Inc., he think there are mainly three reasons why Vietnam stock
market went down these years. One reason is weak macroeconomic problem such as
inflation, depreciation of Vietnam currency and less reserved funds.

The second is

cooperate scandals related inadequate disclosure or accounting system which might disrupt
buying Vietnam stocks by foreign investors. The third point is lack of attractive product
such as derivatives, ETFs, REIT, etc.

7.4 Understanding about the role of Hochiminh Stock Exchange


15

This question is to assess the interviewee to understand how the role of HOSE.
Most everyone knows the important role of HOSE in Vietnam stock market. HOSE is one
of stock exchanges first securities trading in Vietnam. Besides, HOSE is a pioneer in
promoting market. In Mr. Kato’s opinion, HOSE cannot handle the macroeconomic issue
and it should be focused on the latter two issues. HOSE can review listing rule including
cooperate governance and prepare the variety type of products such as derivatives, ETFs,
REIT, etc. and more give education to investors.

7.5 HOSE always continuous to improve and promote the development of Vietnam
stock market
According to the opinion of investors and experts, HOSE always reflect the role of
managers to promote market development and improve the belief for investor. HOSE is
one of the stock market operators in Vietnam and in a closed position to the market (It has
knowledge and know-how as to the stock market). It should lead an initiative continuously

to revitalize the stock market with market participants as other major exchanges are doing.
However, an analyst of Sakura Securities Company said that HOSE still not convince to
improve the market yet with some reasons. For example, HOSE cannot decide the
sanction to disclosure information improperly and still depends on high agency. About the
operation management has not been effectively and non-professional (for example: invest
equipment for trading floor and then remove it in a short time leading to waste fee costs),
still not develop the new trading system.

7.6 Promote strategic for HOSE in the future
Each interviewee has different opinions to contribute strategies for HOSE. A first
strategy that most interviewees desire to develop more products and services for investors
choose such as derivatives, ETFs. It is also important to give an opportunity for investor’s


16

education. In addition, accurate and transparent information are essential for investors.
Recently, the stock market has a lot of information to manipulate the market such as
financial reporting. This information make investors lost the belief and move to invest gold,
banks. “Belief” and “Confidence” of the people in stability of economy and country is
very important. Therefore, investors always expect HOSE build the monitoring and
disclosure of information system more effectively. According to Mr. Kato’s opinion, he
believes that investors prefer liquidity in the market so increasing the liquidity is very
important. Strengthen current listing rule and this lead to enhance of the corporate
governance of the listed company. On the contrary, from the demand side, attractiveness
investing in Vietnam market shall be considered, via trading rule and regulation, tax or
trading system enhancement and the like.

VIII. TARGET SEGMENT
8.1 Vietnamese enterprises

Stock market is a level playing field for all businesses. When the stock is listed,
enterprises will have the ability and opportunity to raise capital directly for business
expansion in the market. In fact, one reason that many businesses do not want to list shares
yet because they do not wish to raise capital. Another reason, economic instability lead to
the stock market going down and businesses no longer see the benefits of doing this. Even
those enterprises engaged in the stock market also faced many difficulties in the valuation,
shares listing. The ability to transfer shares of companies is still low because the sale of
stock is not public yet and the number and percentage of corporate shareholders outside is
low.
According to the report of the Ministry of Planning and Investment, by the end of on 20
November 2011, there were arrangements to be 5,856 corporate and business unit has
including 3,951 enterprises equitized. However, there were only six enterprise listed in
2011. The volatility of macroeconomic and unfavorable development of stock market


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leads to the low progress of equilization in 2011. Moreover, the equitization of large
enterprises will need to implement more cautious as well as take time to evaluate and
handle about financial issue in next time.
Ministry of Planning and Investment will have plan to restructure state owned
enterprises in the restructing of the economy and this will be promoted with the objective
of redistribution and improve the effective using resources in state owned enterprises
sector in general and each state owned enterprises in particular.
There will be 573 equitized enterprises by Government including some group of parent
companies and corporations with 187 subsidiaries and 89 independent enterprises by the
ministry and 239 independent enterprises by local management. This progress of
equitization will help state owned enterprises get the large-scale, highly specialized, high
technology and modern management methods. (Hoai Ngan, 2011)

8.2 Listed companies
Attracting listed companies also is one of the targets of Hochiminh Stock Exchange
with the campaign to raise the listing criteria and information disclosure correctly to local
investors as well as foreign investors. Enhancing the listing criteria for listed companies
improve the quality of listed goods and avoid the effect to the general reputation of the
market. Improving the quality of listed companies and remove some enterprises with the
poor operation on the Hochiminh Stock Exchange and it helps the choice of investors. A
professional market must have the allocation of reasonable goods in order to create
conditions favorable for investors in business portfolio selection.
In 2011, the total number of listed companies on the two stock exchange have up to
700 listed companies but there were still lacked large companies representing the
information technology industry and telecommunications (Vinaphone, MobiFone), food,
beer, soft drinks industry (Sabeco, Habeco). These enterprises are already in business
planning implementation to be listed in the last few years. In 2011, the number of new


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listed companies on two stock exchanges decreased over the previous year mainly due to
unfavorable market. Hochiminh Stock Exchange has added 25 new listed companies,
decreased a half number of comapanies compared to 2010. Although the number of listed
companies in 2011 has declined, the volume of listed shares is achieved by the presence of
Military Commercial Joint Stock Bank (MB). In 2012, HOSE plans that the volume of
listing will reach at least equal in 2011. In particular, the participation of the Bank for
Investment and Development of Vietnam (BIDV) will contribute significantly in raising
the volume of listed shares at HOSE (Report of Hochiminh Stock Exchange).

8.3 Investors
Investor is also the target to promote the development of the stock market by buying
the securities. Buying stock from investors help listed companies raise capital in the stock

market. The stock market decline due to the macro economy and lack of accurate
information has led to a loss of investor belief and they were no longer to attract to invest
stocks. Most local and domestic investors change to invest another field, they sell stocks to
invest gold or save money into bank with higher interest rates. The sale of the stocks
makes stock market goes down steadily and it also assesses stock index increasingly
weaker. Thus, Hochiminh Stock Exchange see local, domestic investors as well as foreign
investors to attract their target invest this market. Although the stock market declined, the
number of investors still did not decrease much. The number of local investors accounted
for 1,161,237 investors’ base including 1, 157, 129 individual and 4.108 institutional. This
is a huge amount.
2011

2010

2009

2008

2007

1, 161, 237

1, 002, 986

810,173

519,196

351, 300

Individual

1, 157, 129

999, 696

807,515

517,359

350, 000

Institutional

4, 108

3, 290

2,658

1,837

1, 300

14, 514

13, 700

12,696

11,941

9, 200

LOCAL

FOREIGN