On the Friday afternoon of our visit to Hanoi, we visited the Hanoi Stock Exchange (HNX). The fact that Vietnam has a stock exchange – in fact, two of them – might come as a surprise to Americans who still think of Vietnam as a communist, centrally managed economy. As a “socialist market-driven economy,” however, it has several of the manifestations of capitalist economies, including the opportunity to invest in companies at least partially owned by individual investors.
Here we are at the exchange:
Pham Tran Nhu Nga, director of the exchange’s public relations department, (ninth from the right) introduced us to the stock exchange. It was fascinating to hear her talk about the origin of the exchange (2005) and its performance over the past ten years. Over that time, the number of companies on the exchange has grown to 377 (as compared to tens of thousands in the U.S.), and the combined market value of the companies has, not surprisingly, increased and declined over the years. The year 2012 saw a sharp decline in the index due to a financial crisis in Vietnam; it has since recovered most of what it had lost.
After hearing Ms. Pham’s presentation, several students commented on how similar the HNX seems to be to the U.S. exchanges. With the exception of the number of public companies (and therefore the volume of shares traded), the operations and structure of the HNX seem to mirror those of the U.S. exchanges.
Ms. Pham answered our many questions, ranging from “Who invests” to the legal and regulatory environment of the exchange to promotional efforts to educate the Vietnamese public on investing – what it is, how it occurs, why it occurs, and of course the risks and rewards that accompany investing.
After our visit to the Hanoi Exchange, I will be paying closer attention to it. In the West, stock markets serve as a proxy for the health of the economy (although not always accurately, due to human emotion!) It will be interesting to see how the HNX fares over the coming years, and how/whether it, too, serves as a proxy for the Vietnamese economy.
By the way, the other exchange is in Ho Chi Minh City. Maybe next year’s students will visit that exchange as well as the Hanoi exchange.
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