Tuesday, 29/09/2015 13:41

Vietnam’s derivative market to launch in late 2016

Vietnam’s derivative market is set be launched in late 2016, according to the Hanoi Stock Exchange (HNX).

Deputy Chairwoman of the Board of Directors Nguyen Thi Hoang Lan, who is also Deputy General Director of HNX, said the Ministry of Finance (MOF) officially entrusted the HNX and the Vietnam Securities Depository (VSD) to operate the derivative market’s transaction activities.

A derivative market is a “high-level” market, posting and transacting future products, which intends to prevent risks for assets, she added.

From 2016-2020, the new market will carry out transactions based on stock accounts such as stock indexes, Government bonds and shares. The two selected instruments are share indexes (HNX30 and VN30) and Government bonds with five-year terms.

Lan added the market’s players are market operating units (HNX and VSD), settlement banks, intermediaries and investors – both enterprises and investment funds. The stock exchange department will develop products and organise transactions while the VSD will implement compensation and settlement functions.

The HNX will provide information on derivative stocks, tender for Government bonds and zero coupon bonds which are scheduled to be issued by late 2015.

A derivative is a financial instrument that derives its value and price from underlying assets such as stocks, bonds, currencies and interest rates as well as commodities and market indices. The most common types of this product are futures, options, forwards and swaps.

The derivative market is an important measure to create qualitative changes for the securities market after a long era of quantitative development. It will also help investors prevent risks and diversify investment channels.

To prepare for the launch of the market, the VSD noted that market players should focus on building a derivative payment system compatible with the VSD’s and training human resources.

vietnamnet
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