Hanoi, August 24, 2015 – The State Securities Commission of Vietnam (SSC), Vietnam Institute for Advanced Study in Mathematics (VIASM) and Bank for Investment and Development of Vietnam JSC (BIDV) jointly organised the seminar “Operation of Vietnam derivatives market”.

 

​Mr. Nguyen Thanh Long, Deputy Chairman of SSC; Mr. Tran Phuong, Senior Executive Vice President of BIDV; Mr. Can Van Luc, Senior Executive Vice President of BIDV; Professor Ngo Bao Chau; Professor Henri Berestycki and representatives from market regulators, members, foreign and domestic experts attended.

On May 5, 2015, the Government promulgated the Decree 42/2015/ND-CP providing the derivatives and derivatives market. Derivatives market is very popular in many countries globally; however, it is still new to Vietnam. Hence, the conference created a forum to share experiences and discussions about the operation and structure of the market together with the result of applied mathematics instruments for the derivatives business.

The Vietnam young financial market accompanied by the development and more deeply international integration of the national economy after the renovation, has gone through her initial stage and been growing strongly for the last 15 years to play more important role in Vietnam socio-economic development.

Being as the channel between capital demanders and suppliers, the bonds and securities market have expanded their size and attracted a large number of brokers, securities companies, foreign and domestic investors with more professional organizational system up to international standards.

Currently, there are 892 listed stocks in three stock exchanges with total market capitalisation accounting for roughly thirty two percent of the GDP and a total day-to-day transaction value of more than VND2 trillion (USD89 million). The bonds market, particularly government bonds, has dramatically developed over the last three years accounting for 22 percent of the GDP. The total transaction value is up to USD89 million each session with 25 bidding members and 54 clearing members, all of whom are prestigious financial institutions in Vietnam.

Mr. Tran Phuong, Senior Executive Vice President of BIDV said: Being a trading member, a payment bank, a depository bank and owning a securities company, BIDV always watches the market movement, the policies as well as actively supports the development of stock market since its establishment in 2000.

The derivatives market opening is a crucial solution to the long time financial market development which requires essential changes. Investors have increasing demands for not only simple structured products but also more sophisticated hedging instruments to diversify their investment portfolio.

Mr. Can Van Luc, Senior Executive Vice President of BIDV:Derivatives market played an important role in the economy.

Financial institutions are special trading members of the market. Financial institutions play the role of intermediaries, trading members, connecting demands of purchasers and sellers of derivative contract, increasing liquidity of the markets.

On the other hand, financial institutions will directly use derivative products of similar purposes to those of investors: for risk hedging, speculation and arbitrage, etc.

Financial institutions also gain other benefits such as increasing proceeds from services, better meeting clients’ demands with specialized products which are designed according to clients’ demand. In addition, financial institutions can diversify their customer base, increase competitiveness, affirming the position of modern financial institutions oriented to advanced products in accordance with international practices.

Mr. Nguyen Son, Director of Market Development, SSC: Developing derivative market is an important content in stock market development strategy until 2020. There are only very basic securities on the financial market (stock, bond, fund certificate), lack of financial instruments like derivative for hedging and leverage investment. The creation of the derivative market is an inevitable development step of the stock market, but there is a lack of legal regulations. Some derivative securities were spontaneously created and should be managed. Therefore, Prime Minister issued Decision 366/TTg to approve the scheme of construction and development of the derivative market.

Mr. Trinh Hoai Giang, Deputy CEO of Ho Chi Minh Securities Corporation (HSC): According to the agenda of the SSC, there will be several new developments of the domestic stock market within the next 12 to 18 months. Key developments include the birth of Futures contracts, Central Counterparty - CCP. HSC has prepared fully for participating in the market including preparation for the membership, building a new system – a general concept, trading system, business processes and procedures and human resources.

Professor Henri Berestycki emphasised the importance of applied mathematical models in Derivative Pricing and Portfolio Management.

Professor Ngo Bao Chau exchanged about the operation plan of Fmathlab. Earlier this year, BIDV coordinated with VIASM to establish the Lab for the Research and Application of Mathematics in Economics, Finance and Banking (FMathLab). VIASM and BIDV also signed a memorandum of understanding on the research and application of mathematics in economics, finance and banking. According to the Professor, providing a high quality financial maths education forms the basis for conducting research projects. The application of maths in the derivative market is essential.

For further information, please contact:

 

State Securities Commission Ms. Dinh Thi Van Linh PR department Cell: 0912020446 Email: linhdv@ssc.gov.vn

BIDV Ms. Pham Hong Hanh BIDV Training School Cell: 0915132288 Email: hanhpth2@bidv.com.vn

VIASM Ms. Vu Thi Kim Xuyen FMathlab Phone: 0436231542-30 Email: vtkxuyen@viasm.edu.vn