The Vietnam stock market has been on investors’ radars for some time. This is especially because of its similarities to China in the 1980s through the 1990s during the much earlier stages of its economic growth.

While equities and currencies have seen a roller-coaster ride in 2015, the Vietnam stock market has been one of ASEAN’s best performing, beating out those in countries such as Singapore and Thailand.

The only issue is that foreigners have found it difficult to invest in Vietnam because of notoriously heavy bureaucracy along with a lack of market information – but they’ve taken steps to fix these things. Banks have become more foreigner friendly and the government has simplified some regulations.

The Ho Chi Minh Stock Exchange, Vietnam’s largest, removed its restrictions on foreign ownership at the end of 2015. The nation’s government is also in the process of privatizing a huge number of state owned business.

But while the websites of many stock brokerages and government departments can be browsed in English, the quality remains poor and there is still a lot of  Vietnamese only information. With that said, there has been a huge amount of improvement over the past decade or so.

These improvements make it more possible for foreigners to invest in the Vietnam stock market.

In contrast with most other countries in Southeast Asia, Vietnam has two major stock exchanges – the main Ho Chi Minh Stock Exchange (HOSE) along with the smaller, secondary Hanoi Stock Exchange (HSX).

 

Stock Exchanges in Vietnam

 

Ho Chi Minh Stock Exchange (HOSE)

  • Vietnam’s Largest Stock Exchange
  • Market capitalization around US$55 billion
  • Total listed stocks: 305
  • Average monthly turnover during the first half of 2015: VND34,660 billion  (around US$1.55 billion)
  • Trading hours: 9AM to 3PM with a break from 11:30AM to 1PM

 

Hanoi Stock Exchange (HSX)

  • Vietnam’s Second Largest Stock Exchange
  • Market Capitalization of around US$6.5
  • Total listed stocks: 361
  • Average monthly turnover during the first half of 2015: VND11,520 billion (around US$0.50 billion)
  • Trading hours: 9AM to 3PM with a break from 11:30AM to 1PM

 

 

Invest in the Vietnam Stock Market

Foreigners can invest in both of Vietnam’s two major exchanges. While there are still some restrictions on the HSX with regards to majority holdings, this shouldn’t become a factor for all but the wealthiest of investors.

 

1. Find a Stock Brokerage in Vietnam

Having a brokerage account is a requirement to begin investing in Vietnam stocks. With language barriers still a problem in the country, its usually best to go with some of Vietnam’s largest firms. That’s because they’re more likely to have someone on hand who speaks English.

Below are the five largest brokerage firms in Vietnam by market share:

  1. Saigon Securities Incorporation
  2. Ho Chi Minh City Securities Corporation
  3. Viet Capital Securities Joint Stock Company
  4. Vndirect Securities Corporation
  5. ACB Securities Company Ltd.

 

2. Open a Vietnam Brokerage Account

Once you have selected a brokerage firm, they will ask for a number of documents to be filled out. The exact types vary based on the brokerage but generally include:

  1. Account Opening Application
  2. Power of Attorney
  3. Application for Securities Trading Code
  4. Copy of Your Passport
  5. For US Citizens, Documentation for FATCA Compliance

 

3. Open a Vietnam Bank Account

The brokerage should also be able to help you open a bank account with one of their partners in order to hold funds and settle transactions. This step requires filling out another form or two (or three), but the brokerage can reuse many of the same documents from the last step.

 

4. Apply for a Securities Trading Code

With everything else finished, the brokerage will apply for your securities trading code – essentially an ID for investors and a requirement for trading stocks in Vietnam. This will require a notarized passport copy, but you should have submitted this for Steps 2 and 3 already.

After applying for a securities trading code, you’re done! Just transfer money to your new brokerage account, start trading, and join in on Vietnam’s economic growth!

About Reid Kirchenbauer

Reid Kirchenbauer is the Founder of InvestAsian. He's experienced with trading stocks and buying property in Thailand, Cambodia, and elsewhere. He's been featured in publications such as Forbes, Nomad Capitalist, Property Report, and Seeking Alpha. Download his free investment guide by clicking here.

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