Why did Vietnam's share price plummet to the paralysis of the exchange?

Vietnam is still one of the few socialist countries in the world. The national management system with Vietnamese characteristics is relatively closed to some extent.

In recent years, Viet Nam has learned from China, continuously increased its opening-up efforts, and basically achieved national opening-up. However, the intensity of opening up is not strong, and it is gradually expanding like China. Like China, Vietnam opened its capital market very late.

Vietnam's stock market has not been established for a long time. Vietnam's stock market (Ho Chi Minh City Stock Exchange Center) started listing in 2000. Hanoi Stock Exchange Center opened in March 2005, which means that it was established more than 10 years later than China, and it is very young and very elementary.

Vietnam's stock market is very similar to China's, and both are trading mechanisms that do not allow short selling and unilaterally do more. Until 2020, the Vietnamese Ministry of Finance proposed to allow short selling of stocks.

Of course, this opened the door for the collapse of the Vietnamese stock market. It should be said that Vietnam is also a developing country, and the financial markets of Southeast Asian countries are generally underdeveloped, except for a few countries such as Singapore, Japan, Hong Kong and South Korea.

It should be said that from a global perspective, Vietnam's development capital market is still relatively backward, and there will be ups and downs in the stock market. In June 2020, Vietnam's stock market crashed and the exchange was paralyzed.

202 1 1 19, after the opening, the Ho Chi Minh Index opened almost at the same level as the previous day, slightly lower, then fluctuated within a narrow range, and the decline expanded after about an hour. About an hour and a half after the opening, the index suddenly began to plummet.

Due to the sharp increase in selling orders in a short period of time, the trading system of Ho Chi Minh Stock Exchange was once squeezed to a standstill, and the market suddenly fell into chaos. The index, transaction and individual stock statistics were once stagnant for nearly 20 minutes. At one time, 440 stocks fell and only 38 stocks rose, among which 1 18 stocks fell (the daily limit of Ho Chi Minh Stock Exchange was 7%), setting a record high.

For the occurrence of this situation, the Vietnamese stock market collapsed to the paralysis of the exchange, which is also rare in the world.

So why on earth did this happen?

1, it should be said that the overall trading mechanism of Vietnam's stock market is not perfect and there is no market maker system, which is closely related. That is to say, when a large number of orders are sold, they are blocked in the trading system, overloading the system and leading to downtime and collapse.

2. In Vietnam's financial market, due to the imperfection of technology and finance, that is, the infrastructure of financial transactions is not perfect, which leads to a large number of trading orders and consumes a lot of resources, making the exchange overwhelmed.

3. The reason why this happened in Vietnam at the beginning has a lot to do with its investors' understanding of the domestic epidemic and economy. When the global epidemic broke out, Vietnam was among them. Vietnamese stock market investors lack confidence in Vietnam's epidemic prevention and control, and are not clear about Vietnam's economic prospects. Causing panic selling, they suddenly built nests. At the time of the biggest decline, the turnover of Ho Chi Minh Index reached an astonishing 16. 16 trillion VND (US$ 702.44 million), and the turnover in less than one day was equivalent to the sum of the average daily turnover since the beginning of this year. Judging from the volume and turnover, it is very amazing.

4. The characteristics of Vietnamese stock market are a bit like China stock market to a great extent, with retail investors as the mainstay. Retail investors often chase up and down, and when they encounter a crisis, they will sell in large quantities, leading to the stampede of transactions. With the downward trend of interest rates in Vietnam, more and more small and medium-sized investors poured into the Vietnamese stock market. In 2020, there were 2.8 million registered trading accounts in Vietnam, an increase of 17% compared with 20 19, in which individual investors were the main growth force.

5. It also has a lot to do with the international environment. After all, there is a global health crisis in the world because of the COVID-19 epidemic, and the stock markets of all countries in the world are stagnating. With the recurrence of epidemics in various countries, it is inevitable to drag Vietnam down.

6. Vietnam's overall economy is sluggish and the unemployment rate has been poor for a long time. The epidemic has further aggravated the concerns of investors in Vietnam's stock market, leading to a panic crash in Vietnam's stock market.

7. To some extent, the reason why Vietnam's stock market is in this situation is that it has risen very much, that is, it has fallen as badly as it has risen. Since the beginning of 20021,the Ho Chi Minh Index has increased by 18%. Since last June 165438+ 10, the Ho Chi Minh index has increased by 23%.

It is reasonable for Vietnam's stock market to collapse when it falls to the exchange.