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Vietnam Capital Market Report

Vietnam Capital Market Report

03/2019 MB SECURITIES JOINT STOCK COMPANY
CONTENTS

Section Page

1 Macro Highlights 3-9

2 Market Overview 10-15

2.1 Market Structure 11

2.2 Equity and Debt Capital Market 12-15

2.3 Legal Framework 16-18

3 How to invest in private/listed stocks in Vietnam? 19-25

3.1 Step for private equity investment (M&A) 20

3.2 Step for investing listed stocks on HSX/HNX 21-25

Vietnam Capital Market Report

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Section 1:
Macro Highlights

1
Vietnam Capital Market Report
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SECTION 1
Macro Highlights (1/6)
Vietnam has been one of the fastest-growing economy in Asia over the last 5 years, with GDP growth’s CAGR of 6.6%

Vietnam’s GDP growth and inflation 2011 - 2018 GDP growth comparison
300 20 8.0%

18
250
16

14
200
12

150 10 5.0%

8
100
6

4
50
2
2.0%
0 0
2013 2014 2015 2016 2017
2011 2012 2013 2014 2015 2016 2017 2018
Asean Developing Asia Vietnam
GDP (current US$ bn) Inflation, consumer prices (annual %)
Real GDP Growth (%)
Sources: GSO, World bank, BMI

 Vietnam witnessed another year of strong GDP growth, at 7.08% in 2018, which likely marks the fourth consecutive year that Vietnam GDP growth
outperforms those of Asean and Developed Asian countries. In the overall context, such impressive result is attributed to the processing and manufacturing
sector with an increasingly open economy and services sector.
 The inflation rate in the post-crisis period, after the tremendous fluctuation during the period 2011 - 2014, has remained low under 5% in four consecutive
years. Its stability in the mid-term vision is supported by the consolidating monetary policies and sound macroeconomic conditions.

Vietnam Capital Market Report

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 SECTION 1
Macro Highlights (2/6)
Increasing effectiveness in public sectors and government’s policies thanks to strong commitments to innovation and marketability of the economy

STATE BUDGETS
AND PUBLIC The government has been determined in accelerating
SECTORS the privatization process, applying technology and
management innovation to enhance the public sector
and encourage the participation of private sector in
IMPROVING
PUBLIC the economy:
INVESTMENT,  There are 406 SOEs in the divestment and
PRODUCTIVITY,
STATE-OWNED
QUALITY AND equalization plan during the 2016 – 2020 period.
ENTERPRISES
EFFICIENCY
AND CREDIT  Over 2016 – 6/2018, privatization process brought
INSTITUTIONS about VND198,000bn to the government budget, a 2.5
times compared to that of the 2011-2015 period.
Some remarkable deals recently include IPO of BSR,
ECONOMY PV Power, divestment from Sabeco.
RESTRUCTURING  In Sep 2018, for a better management of SOEs, State
Capital Management Committee was established to
manage 19 leading SOEs including SCIC, PVN, EVN,
DEVELOPING THE ACV, Petrolimex, VNPT, etc
DEVELOPING FINANCE MARKET,
DOMESTIC LAND USE RIGHT
PRIVATE MARKET, LABOR
Remarkable deals in 2019
SECTORS AND MARKET, SCIENCE  IPO: Agribank, Mobiphone, VNPT, EVNGenco2, ect.
ATTRACTING AND TECHNOLOGY  Divestment: Thanh Long Tobacco, Tien Phong
FDI MARKET Plastic, Vietcombank, BIDV.

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SECTION 1
Macro Highlights (3/6)
Business environment 2019
Over 2016-2018, the business environment in Vietnam increased by
India 77
22 ranks thanks to the government’s efforts in improving and
Taiwan 13
consolidating administration procedures with some of the
China 46
illustration as follows:
Hongkong 4

Indonesia 73
 Simplify preregistration and registration formalities (publication,
Vietnam ranks 4th in WB’s notarization, inspection, and other requirements).
Phillipines 124 selected Asian countries
Singapore 2 in terms of business  Expand court automation by introducing electronic payment,
Myanmar 171 environment. This is a electronic service of process, automatic assignment of cases to
Malaysia 15 13-rank jump compared judges and publishing judgments.
Thailand 27
to the previous year.
 Make the procedure more simple for tax payers by no longer
Vietnam 69
requesting hard copy submission of the value added tax return,
0 50 100 150 200
allowing joint payment of the business license tax and value added
Vietnam ranked 3 in ASEAN and BRICs in terms of Political stability, 2018
tax.
Singapore 1,33  Facilitate the business registration process by publishing the notice of
Brunei 1,08
Vietnam 0,22
incorporation online and reducing the cost.
Laos 0,06
Malaysia 0,05  Plan to cut 3807 out of current 6191 business conditions in 2018. By
South Africa -0,06 Oct 2018, 1133 conditions were eliminated officially. Especially in the
Cambodia -0,16
Brazil -0,28 financial sectors, 26 conditions were no longer effective and 23
Indonesia -0,50 conditions in establishing and operating a securities company were
China -0,55
Russia -0,75 simplified.
Philippines -1,06
Myanmar -1,15
India -1,19
Thailand -1,32 Political stability index

Vietnam Capital Market Report

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SECTION 1
Macro Highlights (4/6)
FDI status over 2012 - 2018
Investment by sector 2013 – 2018, inside-out
40 3,000
35
2,500
30
2,000
25
25%
34% 20 1,500
22%
15
40% SOE sector 1,000
10
Private sector 500
5
38% Foreign Sector 0 0
2012 2013 2014 2015 2016 2017 11M2018
41%
Registered capital (USD bn) Disburment capital (USD bn)
Source: GSO, MBS No. Of new approval projects Sources: FIA, MBS

 Low interest rates, a stable economy, strategic location and an abundant labor FDI inflow by sector, accumulated as of 20/12/2017

force are key attractiveness to draw private and foreign investments. The number 200,000 16,000

of private and foreign investments in Vietnam rose by 3% pa over 2013 – 2018. 160,000
12,000

 By 8/2018, there have been 26,438 FDI projects with total register capital of 120,000
8,000
USD333.8billion. Out of which, USD183.6billion was disbursed from 129 80,000
countries, in which Korean and Japanese investors were the most active with total 4,000
40,000
investments of USD 61.08bn and USD 55.84 billion, respectively.
0 0
 Manufacturing and industrial have been the most attractive sectors to foreigners
due to the countries’ advantages of cheap & abundant labor force as well as
government’s incentive policies.
Registed capital No. Of project

Vietnam Capital Market Report

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SECTION 1
Macro Highlights (5/6)
Debt Outstanding over 2013 - 2018 The banking system of Vietnam has recovered remarkably since the financial
8,000,000 20% crisis, with total assets and outstanding loans of financial institutions rising by
7,000,000
18% ~80% and 96% to VND10,329.3 trillion and VND6,827.1 trillion over the last five
16% years respectively. Meanwhile, bad debt ratio dropped from 3.8% to 2.1% in the
6,000,000
14% same period. Moody has recently changed the Banking system outlook to
5,000,000
12% positive from stable while Fitch raised Vietnam’s long-term foreign-currency
4,000,000 10% issuer default rating to ‘BB’ from ‘BB-.
8%
3,000,000
6% Key improvements are:
2,000,000
4%  Material and sustained progress on fiscal consolidation allows the
1,000,000
2%
government to reduce borrowing demands, transferring capital to the private
0 0%
2013 2014 2015 2016 2017 Jun-18 sector.
Total debt outstanding (VND bn) Growth rate Bad Debt Ratio  Continued clean-up of legacy problem assets, build-up of capital buffers,
and improvements in transparency and governance that significantly
Total assets of financial institutions diminish contingent risks to the government and lower macro-financial risks
in-side-out (2013- 5.2018)

65
 Improvements in data transparency that raise the credibility and
17 effectiveness of policy.
SOE commercial banks
705
Government set goals for financial market by 2020:
1,009 Comercial Jsc Bank
 The ratio of bad debts (including items on balance sheets of credit institutions,
2505
4,654 Joint Venture Bank amounts sold to AMC) must be reduced to below 3%.
4,197  Most of commercial banks must follow Basel II standards for the equity capital
Financial Leasing
Company ratio and at least 12 to 15 players apply successfully Basel II standards.
2463 Co-Op Bank  Capital sizes of the stocks, government bonds and insurance markets are
targeted to rise to 70%, 30% and 40% of the annual GDP.

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SECTION 1
Macro Highlights (6/6)
Fintech boosts the financial market further:
 There are 80 fintech companies in Vietnam
as of 5/2018.
Fintech product segmentation in 2017 & projected trend in
2025F (in-side out:2017-2025) Total digital payment transactions value
 Digital Payment solution is the current
leading segment with market share of 89% 120,000
102,326
in term of value. In 2017, there were 10 6% 100,000
million e-wallet accounts with total
80,000
transaction value of USD 4.4 billion. 9% 2% Digital Payment

VND bn
24%
60,000 53,109
 Digital finance and corporate finance are
Personal Finance
expected to rise by CAGR of 31.2% and 40,000 32,384

35.9% in market values over 2017-2025, 20,000

Corporate Finance
respectively given potentials in consumers 89% 70%
finance and booming in the number of start- -
2015 2016 2017
up companies.
Source: Solidiance Source: SBV. MBS

Banking penetration in Vietnam - 2017 Golden population structure

Fintech market - Strong market potentials
80+
• 59% - was banked population in 2017, well Malaysia 92%
70-74
below than the number in Thailand and Digital immigrants
60-64
Malaysia. It’s projected to increase to 70%
50-54
in 2020. Thailand 86%
40-44

• 50% of total population is at the age of 30-34 Digital native –

Trend leaders
digital native (20-45 years old) and 10% is Vietnam 59% 20-24
the number of IT trained employees. 10-14
0% 20% 40% 60% 80% 100% 0-4
10,000 8,000 6,000 4,000 2,000 0 - 2,000 4,000 6,000 8,000 10,000
Source: World Bank
2015 2020
Vietnam Fintech
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Section 2:
Capital Market Overview
2.1 Market Structure
2.2 Equity and Debt Market Overview
2.3 Legal frameworks

2
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 SECTION 2
2.1 Market Structure
The structure of Vietnam Stock Market The structure of Vietnam Debt Capital Market

Ministry of Ministry of
Secondary
Finance Primary market Primary market Finance Secondary
market market

SSC SSC
Gov.Bond
SSC SSC
Issuance Gove. Bond Market Corp. Bond Market

HNX HSX VSD Securities VSD T-bills T-bonds

firms/Exchanges
trading trading settlement settlement
SBV VSD HNX HNX VSD HNX HSX VSD
Private
placement/auction
Securities Corp.Bond
firms Banks trading settlement trading settlement
Issuance
Investors
Investors
Securities Securities Securities Securities
Banks Banks Banks
 No. of securities companies: 77 Firms Firms Firms Firms
 No. of management funds: 47
 No. of total accounts: 2,145,375
 No. of securities investment funds: 25
 No. of individuals investors: 2,133,032  No. of rep. Offices of foreign securities
business organizations: 20
 No. of institution investors: 12,343
 No. of depository banks: 14 Others
 No. of foreign investors: 27,754
Investors Investors Investors
 No. of settlement banks: 01

HNX=Hanoi Stock Exchange SSC=State Securities Commission

HSX=Hochiminh Stock Exchange VSD=Vietnam Securities Depository
Source: VSD, MBS SBV=State Bank of Vietnam Source: VBMA, MBS
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 SECTION 2
2.2 Vietnam Stock Market (1/4)
MXFEM Index Reach a peak in 2/2007 as 2017: heavy flow of foreign investment as loosen
700.0%
monetary policies and foreign monetary policies in US, EU=> sharply growth
600.0% VNINDEX Index capital flows. and hit a new peak in 4/2018

500.0%
2009: Government
400.0% kicks off economic 8/2017: Launch
Stimulus Package Derivative market
300.0% 1/2016: Apply T+2
2011: Effect of
200.0% Become a member stimulus package
of WTO in 11/2006.
100.0% Foreign capital start 2008: Global Financial crisis. 2012-: Restructure economy policy, focus on
flowing to Vietnam. Fall to bottom in 2/2009 financial organizations, SOEs and public investment
0.0%

-100.0%
12/2/2002 12/2/2003 12/2/2004 12/2/2005 12/2/2006 12/2/2007 12/2/2008 12/2/2009 12/2/2010 12/2/2011 12/2/2012 12/2/2013 12/2/2014 12/2/2015 12/2/2016 12/2/2017 12/2/2018

Market Cap and Number of listed companies Trading value (VND bn) P/E comparison
4,500 900 3,000,000 25
4,000 800 21
2,500,000
3,500 700 20
20 18
3,000 600 2,000,000 18
VND trillion

2,500 500
1,500,000 15
2,000 400
1,500 300 1,000,000
1,000 200 10
500,000
500 100
0 0 0
5
31/12/2015 31/12/2016 29/12/2017 31/10/2018
HNX (LHS) HOSE (LHS)
0
UPCoM (LHS) # of listed comps (RHS)
Thái lan Indonesia Philipine Việt Nam
# of Upcom comps (RHS) HNX HOSE UPCom
Source: MBS collection, calculation and computation
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SECTION 2
2.1 Vietnam Stock Market (2/4)
Secondary market – Underpenetrated with huge room for further growth
Vietnam stock market is still underpenetrated Increasing foreign capital inflow & introduction of new products
 The percentage of foreign
 Out of 90 million of population, there are only 1.9 million individual accounts. Given Net foreign capital flows
participation is still modest with VND billion
consistently superior return of stock market over traditional investment channels
only 27,412 foreign investor 30,000
(deposit and gold) and increasing transparency, the stock market is expected to
accounts as of Sep 2018. 25,000
attract more new investors.
Return yoy over 2007-2018 Nonetheless, being set on its 20,000

watch list for reclassification by 15,000

80.00% 10,000
FTSE Russell (to a “secondary
60.00% 5,000
40.00%
emerging market”) with potential
0
20.00% MSCI upgrade, the local market
-5,000
0.00% is expect to attract increasing
-20.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 -10,000
foreign capital flows in the near
-40.00%
-60.00% term
-80.00%
 The commencement of the first
Vnindex return Gold Return Deposit interest rate (VND)
derivatives product - future Derivatives Market
No. of contracts VND billion
 Market cap per GDP is relatively lower than neighboring countries, at ~75% as of
contract of VN-30 on August
2017, indicating the market is still in the early stage of development. 3,000,000 300,000
2017 has made the market more
200.0% 2,500,000 250,000
vibrant and dynamic. In just one
160.0% year, more than 40,000 accounts 2,000,000 200,000

120.0%
was opened with total transaction 1,500,000 150,000
value reaching VND~258 trillion 1,000,000 100,000
80.0%
in Jul 2018.
500,000 50,000
40.0%  More products are expected to
be introduced in the coming 0 0
0.0%

Aug-17
Sep-17
Oct-17
Nov-17
Dec-17

Apr-18

Aug-18
Sep-18
Oct-18
Jan-18

Jun-18
May-18
Mar-18
Feb-18

Jul-18
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 period: T0, corporate bonds,
Vietnam Thailand Philippines Indonesia Malaysia
short selling, covered warrant
Source: HNX, MBS
and other derivatives products. volume Value

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Source: Bloomberg, World Bank, MBS
SECTION 2
2.1 Vietnam Stock Market (3/4)
SOEs privatization creates a dynamic primary market M&A market witnesses a growing trend in both volume and value
Given the government’s determination in State-owned enterprise privatization, total  The market witnessed 4,353 M&A transactions with the total value of USD
equitization value reached a record of VND140trn in 2017. 48.8 billion over in the last 12 years. In the period 2006-2012, the market was
Total value of SOEs equalization and divestments mostly driven by the number of transaction, while recent years witnessed
150,000 140,000 increasingly big transactions with total transaction value reaching USD5 billion
as of 1H2018.
Unit: VND billion

100,000 M&A volume and value over 2006 - 2018

600 12,000
500 10,000
50,000

USD million
28,055 400 8,000
300 6,000
980 6,060 3,641 30,000 200 4,000
0
100 2,000
2013 2014 2015 2016 2017 1H2018
0 0
Looking forwards, The government continues planning to privatize 259 companies
in the next 2 years, including big companies such as PVN, Vietnam Airline, ACV,
Tien Phong Plastic, VinaPharm, etc. Number of Transactions Total Transaction Value

Total value of IPOs and capital raising from new share issuances over
VND billion 2013 - 2018 Breakdown of M&A value by sectors
 FMCG and Real Estates have inside-out: 2017-1H2018
3% 1%
25000 100
witnessed the highest number
20000 80 of M&A deals in recent years. 10%

15000 60 In 2017, FMCG deal value FMCG 3%

9%
4%
10000 40 made up 57% of total value. By Real estate 19%

5000 20 1H2018, the value of M&A Banking - Finance 27% 57%

0 0
deals in Real Estates accounts Manufacturing
67%
2013 2014 2015 2016 2017 2018 for 67% of total transaction Others

No.of IPO IPOs New shares value in the market.

Source: MAF, MBS Vietnam Capital Market Report
03/2019 Source: Stox Plus, MBS MB SECURITIES JOINT STOCK COMPANY
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SECTION 2
2.1 Vietnam Stock Market (4/4)
Regardless of a rapid growth in recent years, the local bond market is still considered undeveloped, especially when it comes to corporate bond

Bond Outstanding by type, 2008-2018

The last ten years witnessed a rapid growth in the local bond market with
60 30% the outstanding value increasing from ~USD13bn in 2008 to ~USD53bn in
50 25% 2018. Nonetheless, the market size is still relatively small, making up only
40 20% ~23% of GDP. The government has approved a roadmap for bond market
USD bn

30 15%
development, under which the ratio of outstanding value to GDP is
expected to be 45% in 2020 and 65% in 2030.
20 10%

10 5%
 The local bond market is dominated by government and government-
linked issuers with total outstanding value standing at 21.5% of GDP as
0 0%
of Sep 2018.
 Corporate bonds’ outstanding value only stands at ~1.5% of GDP, while
the bank loan to GDP ratio has reached ~130%.
Government - LHS Corporate - LHS  In the secondary market, there are only 585 companies/institutions
Government(% GDP) - RHS Corporate(% GDP) - RHS having bonds listed on HSX and HNX. Average trading value per month
stood at only ~USD420M in the first 10 months of 2018.
Corporate bond market size in Asia countries in 2018 Bond Outstanding on listed market

160 50% 700 0.7

140 45% 600 0.6

40%
120 500 0.5
35%

USD bn
100 400 0.4
30%
80 25% 300 0.3

60 20% 200 0.2

15%
40 100 0.1
10%
20 0 -
5%
0 0%
Hongkong Indonesia Malaysia Phillippines Singapore Thailand Vietnam

Value (USD billion) %GDP Number of companies/institutions - LHS Trading Value (USD bn) - LHS

Vietnam Capital Market Report

03/2019 MB SECURITIES JOINT STOCK COMPANY
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SECTION 2
2.3 Legal Frameworks (1/3)
Law on securities no. 62/2010/QH12 and no. 70/2006/QH11

Participants
in stock Decree No.163/2018/ND-CP Decision 501, 750/QD-SGDHN Decree No. 42/2015/ND-CP on
Decree No.
markets 58/2012/ND-CP; Regulations for Corporate Bond Circular 46/2017/TT-BTC; derivative securities and
operate in ND. 60/2015 on Issuances Decision 1583/QĐ-NHNN and derivatives securities market
accordance stipulating in others – Regulations for
with the Law detail and guiding Trading Government and
on Securities the Corporate Bonds
2006 and implementation Circular 155/2015/TT-BTC;
decision no.340/QĐ-SGDHCM; Decree No. 86/2016/NĐ-CP
amendmanets of a number of
articles of the Decision No.606/QĐ-SGDCKHN Requirements for Investment
2010, and Trading in Securities
securities law and on guiding information disclosure
documents in stock market
the law amending Document 01/VBHN-BTC and
and
and Decree no.145/2016/ND-CP, no
regulations
supplementing a 108/2013/ND-CP on Penalties
related to number of Decision 653/QĐ-SGDHN and Circular No.115/2017/TT-BTC
for Administrative violation
securities articles of Decision 341/QĐ-SGDHCM – Instruction for supervising
against regulations on securities
markets securities law Regulations for Trading Securities securities trading in stock
and securities market market
in Stock Exchanges

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SECTION 2
2.3 Legal Frameworks (2/3)
Law on Enterprise 68/2014/QH13

Law on Securities 2006, amendments 2010

Decree no. 108/2003/NĐ-CP Decree No. 86/2016/ND-CP

Decision No.87/QĐ-UBCK on
about penalties for Decree on requirements for
Securities administrative violation in the promulgation of regulation
investment and trading
securities sector guiding the margin trading
firms operate securities
in accordance Securities
with the Law firms operate
Circular No. 162/2015/TT- Circular no. 87/2017/TT-BTC
on Enterprise under direct Circular no. 210/2012/TT-BTC
NHNN guidelines on public Prudential indicators and
2014, govern of the and no.07/2016/TT-BTC actions against securities
offering, stock swap, issuance provides guidance for
documents Law on of additional stocks, trading organizations that fail
and establishment of securities
Securities repurchase of stocks, sale of company to achieve prudential
regulations 2006 and treasury stocks and indicators
related to tender offer
amendments
securities 2010 Circular no. 128/2018/TT-BTC Circular no. 217/2013/TT-BTC
markets Regulation on securities fees provide guidance for
applied in securities implementing penalties for
Decree No. 42/2015/ND-CP on
companies, commercial bank administrative violation in
derivative securities and participated in stock market.
derivatives securities market securities sector

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SECTION 2
2.3 Legal Frameworks (3/3)
Legal Framework for Securities Companies

Foreign ownership ratio in securities companies is increased from 49% to 100% in accordance with decree no. 60/2015/NĐ-CP.

2012-2016
Circular no. 210/2012/TT-BTC provides guidance
for establishment of securities company and 1
Circular No. 07/2016/TT-BTC on amendments
and supplements to certain articles of the Circular
2012 - 2015 No. 210/2012/TT-BTC
• Regulations for the conditions of institutions
• Decree no. 58/2012/NĐ-CP provides guidance (including foreign institutions) for contributing
for implementing the Law on Securities and capital in securities company
Decree no. 60/2015/NĐ-CP, amendments of • Limits borrowings ratios of securities
Decree no. 58 companies: total liabilities/Owner’s equities <=
• Legal capital for each business segment of 3, investment in real estates/total assets <=
securities companies: Brokerage 25 billions 50%, investment in bond /owner’s equities <=
2006 - 2010 VND, proprietary trading 100 billions VND, 70%.
 Law on Securities 2006 and amendments underwriting 165 billions VND, investment • Regulations for responsibilities, duties of
provides regulations for establishment and consulting 10 billions VND securities company for each business
operations of securities company • Ownership ratio of foreign investors is segment: brokerage, proprietary trading,
 The SSC is an agency under the MoF, increased from 49% to 100% of charter capital. advisory services, investment consulting,
responsible for granting Business Registration • Conditions, procedures related to public underwriting
Certificate, inspecting, managing and offering, listing, etc.
supervising operations of securities companies

MB SECURITIES JOINT STOCK COMPANY

Vietnam Capital Market Report
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Section 3:
How to invest in private/listed stocks in Vietnam
3.1 Steps for private equity investment (M&A)
3.2 Steps for investing listed stocks on HNX/HSX

3
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 Section 3
3.1 Steps for private equity investment (M&A)
General procedure of a M&A transaction What MBS could support in M&A transaction?
Scrutinize the
1 “target” Market and Target Researches support in step 1.

Defining
Target review
Market-entry Target, Deal
and Initial
research Identification structuring
Transaction Contact
2 Execution
and Selection

The target operates in

conditional sectors or Transaction Execution Support in step 2.
foreign investors owned 3a 3b
over 51% of stake equity The target operates
at the target of the deal in unconditional
done sectors
Open a bank
Due Bidding
account at a Deal
3.1a Approval 4.1 commercial bank diligences Valuation assistance &
Completion
in Vietnam supports Negotiation
Register for Investment
Department at Plan and
Investment Division
4.2 Sign SPA 7 Deal-closed Procedure Support from step 3 -7

Working with authorities: MOIT/MPI/State Owners/ Province’s

Planning and Investment
Payment and transfer equity. 6 Register for Business
5
Notify to Plan and Investment Department Registration
Support in working with Commercial bank
* This is typical admin procedure reference, Execution M&A process follows the global standards.
Pitchbook
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 Section 3
3.2 Step for investing/trading stocks in Vietnam Stock Exchanges (1/5)
Trading procedure for foreign investors

Opening a Trading Account

Trading Process
Open an
Indirect/Contributi
on Capital
Apply for a (IICA/CCA)
Securities Trading account at a
Code (STC)* at Commercial Bank
VSA (submit Transfer money from
oversea account to an VND VND
application form IICA/CCA Securities Place an
and other required USD account in one account Account order
documents. Vietnam bank in USD, USD* VND

Open a Securities
Trading Account
After having fulfilled their tax obligations to the State of Vietnam, foreign investors shall be entitled
MBS will support to apply for a STC and open banking and trading to purchase foreign currency at authorized banks to remit overseas in accordance with applicable
account given the full apply dossier provided by foreign investors laws on foreign exchange control; Income tax: 0.1% of gross value of sale proceeds.

Besides, foreigner investors can invest in open-end funds in Vietnam by opening accounts in the fund and transfer money from IICA/CCA account.
 VSD: Vietnam Securities Depositary
 MBS: MB Securities Joint Stock Companies
 STC: each foreign investor has only one Securities Trading Code and only one Securities Trading Account for trading securities in Vietnam Stock Markets. This code is issued on a perpetual
basis and does not expire or require reapplication or renewal.
 IICA/CCA account: A Vietnamese Dong (VND) cash account is mandatory, The IICA/CCA account can only be used for securities-related transactions in Vietnam. A US Dollar (USD) cash
account is optional to foreign investors and is used for transfer or remittance of USD funds offshore. Vietnam Capital Market Report
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Section 3
3.2 Step for investing/trading stocks in Vietnam Stock Exchanges (2/5).
Trading process in underlying market for both domestic/foreign investors

Investors
App Stock 24/Mstock
T+0 24/Mobile 24 If matching, T+2 Clearing
Place an House
Notify and suspend order
cash/stocks in client’s Brokers( chat,phone, MBS MBS
account if matched. email, fax)

Bloomberg Fix Gateway

MBS received
immediately Seller’
Buyers’
Trading
Trading
Account
Notify when Account
matching or Send
closing the order
trading day
MBS
HSX/HNX MBS
received order VSD
immediately
MBS: present for Vietnam securities companies
which investors has trading accounts in.

All steps are conducted automatically in securities companies/VSD/Clearing House.

Settlement’s principle: Delivery Versus Payment
VSD makes securities settlement in the form of book-entry transfer via the system of depository accounts of selling and buying members and simultaneously adjusts ownership
information on depository accounts of buying and selling investors. The settlement bank (Bank for Investment and Development of Vietnam) makes cash payment via the system
of cash accounts opened by depository members at the settlement bank based on the cash clearing result sent by VSD.
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 Section 3
3.2 Step for investing/trading stocks in Vietnam Stock Exchanges (3/5).
Required documentations to apply for STC, open bank and securities Trading schedule
account
• Trading day: Monday to Friday (except public holidays)
Be Regulated in Decree 123/2015/TT-BTC dated 18/08/2015 providing guidance • Trading hour: 9:00 – 14:45 GMT+7
on foreign investment activities on Vietnam stock market and decision 213/QĐ-
Hochiminh Hanoi Stock
VSD dated 18/12/2015 and regulations of commercial banks/securities
Stock Exchange Exchange
companies: (HSX) (HNX)
1. Application form for trading code (VSD’s form)
2. Application form for opening trading account For share Opening periodic order 9:00 – 9:15 -
and matching and put-through
3. VSD_Clients authorize MBS for application of Trading Code
investment
4. Notarized and Legalized photocopy of the Client’s passport (for individual)/ fund Continuous order-matching 9:15-11:30 9:00 – 11:30
the Client’s Business Reg. and the Representative’s passport (for institutions) certificates I and Put-through
5. Request for the confirmation of the registration of the account “capital
Intermission 11:30-13:00 11:30-13:00
contribution, share purchase in VND”, which is maintained at the custodian
commercial bank
Continuous order-matching 13:00 – 14:30 13:00 – 14:30
6. Application for opening VND securities trading account
II and Put-through
7. Application for opening individual/corporate account (USD account)
8. Notarized photocopy of Certificate of Trading Code (for institutions) Closing periodic order- 14:30 – 14:45 14:30 – 14:45
matching and Put-through
For securities investment funds, additional documents are required (Needs to Put-through 14:45 – 15:00 14:45 – 15:00
be translated into Vietnamese and verified by an authorized body of Vietnam):
For Bond Put-through 9:00 – 11:30 9:00 – 11:30
1. Copy of its investment license verified by authorized body of Vietnam ATO: At the Opening – to determine opening price
2. notarized copy of Charter of management fund (if any). ATC: At the Closing
Intermission – to–determine
11:30 13:00 closing price
11:30 – 13:00
3. Financial statements during the recent two consecutive years.
4. Copy of Summary of Operation and Objective of Business in Vietnam. Put-through 13:00 – 15:00 13:00 – 15:00

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 Section 3
3.2 Step for investing/trading stocks in Vietnam Stock Exchanges (4/5).
Types of orders: Matching Principles

 ATO & ATC Trading: Buy and sell orders are entered in the trading  Price Priority
system and queued for matching at a specified time at a single price  Buy orders at higher price shall take precedence
that generates the greatest trading volumes for that particular stock.  Sell orders at lower price shall take precedence
This matching method is used to determine the opening price and  Time Priority
closing price of a particular stock.
 For buy or sell orders at the same price, those entered into the
 Limit price: The trading system continuously matches the first buy and trading system earlier shall take precedence in execution
sells orders in the queue, and at the same time, confirms each
executed transaction via the member’s terminal. Price range
 Market price (MP): MP is an order to buy or sell a stock at the best
available price. The order can be matched at more than one price level.  No price range applied for bonds.
Unmatched quantity (if any) will be converted to a limit order at price  Price range for stocks, closed-end fund certificates :
equal to the last executed price plus/minus one price spread. Market
order is allowed during opening session only Ceiling price = Reference price x (100% + Price range)
 Put Through (PT) Trading (just in underlying market): Members
Floor price = Reference price x (100% - Price range)
negotiate on details of the deals and enter in the trading system for
approval. The trading system allows brokers to advertise buy or sell • Price range: HSX: 7%; HNX :10%; Upcom: 15%
interests. Members may then deal directly with each other and prices
• Reference price:
may be adjusted during the negotiation. However, the executed price
must follow the price range for that particular stock during the day. HSX/HNX: the closing price of stocks on the previous trading date

Upcom: the average weighted price of all executed prices by continuous order
matching method on the most recent trading date.

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Section 3
3.2 MBS’s fee structure for investing/trading stocks in Vietnam Stock
Exchanges (5/5).
Fee for equities trading in Underlying market Fee for bonds trading

Transaction Charges rate via transaction channel 0.02% -0.1%/total transaction

value/date/account value/account
Brokers/Trading Contact 24 Stock 24 Mstock24/Home24
stores
<VND 100 million 0.35% 0.35% 0.3% 0.3%

VND 100-300 million 0.325% 0.325% 0.3% 0.3%

VND 300-500 million 0.3% 0.3% 0.25% 0.25%

VND 500-700 million 0.25% 0.25% 0.2% 0.2%

VND 700-1000 million 0.20% 0.2% 0.15% 0.15%

>VND 1000 million 0.15% 0.15% 0.15% 0.15%

Fee in Derivaties market

Trading fee close/open in day Trading fee overnight/contract

expiration
Current customers VND 7,000/contract/trade VND 12,000/contract/trade

New Clients: In 1st 3 months VND 5,000/contract/trade VND 10,000/contract/trade

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 Disclaimer
This Presentation, including information, figures, data, statements, forecasts, projections, if any contained herein have been prepared for the purposes of
introducing potential investment opportunities in equity transactions of the target company and providing certain highlights for considerations to and of
potential investors. Those information, data, statements, etc. should be treated as additions to assist prospective investors in making their own evaluation on
the target company. In all cases, recipient/readers/investors should conduct their own investigation and analysis of the target company and data set forth in
this information. MB Securities Joint Stock Company (“MBS”) and/or their officers, directors and employees may have positions and may affect transactions in
securities of companies mentioned herein and may also perform or seek to perform investment banking services and do not accept or assume any liability,
responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication
or for any decision based on it. The use of any information, statements, forecasts or projections contained herein shall be at the sole discretion and risk of the
user(s).
This Presentation and anything in it has been prepared based on information available to it including but not limiting to public sources which have not been
independently verified. No representation or warranty, express or implied is provided in relation to the accuracy, completeness or correctness of such sources.
Expressions of opinion herein were made after due and careful consideration, based upon the best information then available, and in our opinion are fair and
reasonable in the circumstances prevailing at the time. Such opinions contained herein are subject to change without notice. This document is not, and should
not be construed as, an offer or the solicitation of an offer and/or an advice to buy or sell any securities.
This document is for private circulation for further discussion purposes only and is not for publication in the press or elsewhere.
© 2018 MB Securities Joint Stock Company. All rights reserved.

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03/2019 MB SECURITIES JOINT STOCK COMPANY
 MB SECURITIES JOINT STOCK
COMPANY (MBS)
Hội
MB Building
No 3 Lieu Giai, Ba Dinh, Hanoi
Tel: + 84 24 3726 2600
Fax: + 84 24 3726 2601
Hotline: +84 24 3755 6688

Ho Chi Minh Office

Sunny Tower, 5th Floor
259 Tran Hung Dao, District 1, HCMC
Tel: +84 28 3920 3388 PHAM XUAN ANH DOAN LINH HUONG
Fax: +84 28 3838 5181 Head of Investment Banking Head of M&A & International Relation
Tel: 84 91 244 8688 Tel: 84 91 590 1069
Email:[email protected] Email:[email protected]
M&A VÀ QUAN HỆ QUỐC TẾ
KẾ HOẠCH PHÁT TRIỂN 2018
03/2019 MB SECURITIES JOINT STOCK COMPANY
27