Trading at least 100 stocks pushed small investors to poor quality stocks?
Vietnam’s stock market (stock market) is experiencing the most exciting period ever with a “massive” cash flow pouring into all 3 floors, pushing liquidity regularly over 10,000 billion dong per session.
On HoSE alone in the past 2 months, the matched value also remained at an average high of nearly 7,200 billion dong / session. Even in November, there were matching sessions of over 10,000 billion dong – something that never appeared even during the period when the VN-Index reached its historic peak of 1,200 points.
The explosive liquidity partly came from the wave of “F0” investors entering the market, which proved that the number of new accounts opened reached a record.
In October alone, domestic investors opened 36,451 new accounts, an increase of more than 5,000 accounts compared to the previous month. In which, the number of individual investors opening newly in October was 36,346 and 105 new accounts opened from institutions.
After the first 10 months of the year, domestic investors opened nearly 290 thousand new accounts, 100 thousand more accounts compared to the whole year 2019 (nearly 189 thousand accounts). In which, the number of new accounts opened since the outbreak of Covid-19 (from March to now) is up to 261 thousand accounts.
The recent “massively” opening of securities accounts by domestic investors comes from the fact that non-securities investment channels are becoming less attractive, such as deposit interest rates falling to low levels; Gold price fluctuates around historical highs and a large difference compared to world gold; Liquidity weakened the real estate channel due to the Covid-19 translation and the corporate bond channel was tightened because Decree 81 took effect in early September.
The abundant domestic cash flow played an important role in helping the market to recover strongly in the context of non-stop net selling by foreign investors. In October alone, foreign investors net sold 7,500 billion dong on HoSE and net selling value from the beginning of the year until now was nearly 10,000 billion dong.
PRESSURE ON TRADING SYSTEM
Obviously, the increasing number of stock accounts at a rapidly increasing speed shows that the confidence of investors in the stock market is gradually improving. However, there is also an increasing pressure on the technology infrastructure to ensure a smooth transaction system.
In fact, the error from the trading system has appeared many times in the past, affecting the psychology of investors, especially in “sensitive” times when the market rises or falls with a large amplitude or liquidity boom. explosive.
Most recently, in the booming session of November 10, VNDirect Securities’ price list system had problems, completely not showing market fluctuations. In the afternoon, the system of another major securities company, SSI, also reported an unstable connection error, leading to unsuccessful orders placed on the online trading systems of SSI and not being sent to the exchange.
Before that, another trading session on June 9 showed signs of problems with the stock companies’ price list not ending as usual while maintaining the status of “ATC session” until 15:30.
HoSE has recorded cases of system errors from order matching software leading to technical problems in the periodic order matching phase to determine closing prices on January 22, 2018. HoSE was unable to fix the problem and was forced to stop trading for two sessions January 23 and 24 before the transaction resumed on January 25.
A similar situation took place in May 2008, HoSE was also suspended for three days due to system problems.
In order to reduce the system load when the liquidity of transactions is high recently, HoSE has recently decided to consult member securities companies on increasing even-lot trading units (trading lots) from 10 stock up to 100 stocks.
HoSE’s move immediately faced opposition from the Vietnam Association of Financial Investors (VAFI) because it believed that raising the minimum trading lot to 100 shares would prevent the development of the stock market.
In fact, the wave of “F0” recently is mainly individual investors and not all of them have the skills and knowledge to really participate in the market. Many amateur investors who do not have much experience and modest capital initially join the market with the mindset of testing the “real war” environment.
VAFI believes that raising the minimum trading lot to 100 shares will indirectly eliminate 10 times the chance of a successful stock investment training trial, while pushing retail investors into poor stocks. amount due to Bluechip’s stock becomes “very expensive”.
According to this organization, there are tens of thousands of students with a meager amount of 5 million, 10 million, 20 million, 30 million… participating in the market. The trading of lots of 100 shares makes it difficult for them to access stocks with high market value, thereby not creating a portfolio of at least 5 stocks to create a portfolio.
VAFI’s argument is completely grounded when looking at market price statistics of shares listed on the HoSE. By the end of November 27, HoSE had 50 stocks with market price of 50,000 VND / share or more, including many blue-chips stocks familiar to investors such as VIC, VHM, MSN, SAB, VNM. MWG, FPT, PNJ, PLX, GAS, BHN, BVH, VJC …
Notably, the 10 stocks with the highest market price on the HoSE are priced at over 100,000 VND / share, which means that investors must have at least 10 million VND to participate in trading these stocks. Even, investors will have to spend the amount of 4 gold maces if they want to buy 1 order to buy the most expensive stock on the floor, VCF.
VAFI recommends that securities companies pay attention to investing in trading software, with small securities companies that do not have enough financial resources to make modern software to limit the number of trading customers or not to become trading members to force them to. Shareholder structured assets or dissolution.
It is difficult to accurately assess the effectiveness of raising the minimum trading lot to 100 stocks in an attempt to limit breakdown from the trading system. However, this will obviously create a great barrier for retail investors to access many quality stocks.
Source: bizlive.vn – Translated by fintel.vn
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