Vietnam launches derivatives market to boost liquidity
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Vietnam’s derivatives market is officially launched today, with stock futures contracts the first to begin trading.
Derivatives trading was planned several years ago to help draw more investment to Vietnam’s capital markets and broaden the country’s finance industry.
The futures market would initially launch stock index contracts, and when fully operational, more instruments would be introduced.
“(The launch) will help attract more foreign investors, institutional investors in particular, and boost market liquidity,” the stock exchange said in a statement.
The VN30-Index, which is reviewed periodically, captures the performance of the 30 largest companies by market capitalization on the Ho Chi Minh city stock exchange. The futures contracts are allowed to move by a maximum of 7 percent in each session.
The benchmark VN Index has jumped 19.1 percent so far this year and hit its highest level of 796.62 points since 2008 on Tuesday.
Questions & Answers
Q.What is the primary objective of launching Vietnam's derivatives market?
What is the primary objective of launching Vietnam's derivatives market?
The launch aims to attract more investment to Vietnam’s capital markets, broaden the country’s finance industry, and boost market liquidity by drawing foreign and institutional investors.
Q.Which financial instruments are trading at the initial launch of the derivatives market?
Which financial instruments are trading at the initial launch of the derivatives market?
Stock futures contracts are the first instruments to begin trading. The futures market will initially launch stock index contracts, with more instruments to follow when fully operational.
Q.What index do the stock futures contracts relate to?
What index do the stock futures contracts relate to?
The futures contracts relate to the VN30-Index. This index tracks the performance of the 30 largest companies by market capitalisation on the Ho Chi Minh City stock exchange.
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