During the period when stocks rose sharply, every day after 13:30, the buy and sell orders on the HoSE slowed down, dull, or even not matched.
The HoSE electronic board sometimes turns out to be flashing, it takes a long time to see a few single matched stocks flashing. This morning session (February 18), when the market plunged after the ATO, the difficult to trade situation occurred when the bottom catching demand increased rapidly at low price range. By the middle of the afternoon session, when the liquidity on HoSE reached nearly VND 15,000 billion, the congestion happened again.
In early February, due to a proportion of investors taking Tet holidays early, the value of matching transactions (excluding the put-through transactions) on HoSE has decreased, fluctuating from 10,000 to 12,000 billion VND / day, so the entry order was matched. faster, investors can see the results of the sale immediately. The session close to the last session of the year Canh Ty, a senior brokerage staff at a securities company with the second largest size market forecasted: “Today’s transaction value is about 10,000 billion VND, the road will pass the summer will open up “.
However, the forecast of this broker was reversed. On that day, the market dropped, both buying and selling sides entered drastic orders, their trading value soared to over 15,000 billion dong, up 50% from the previous session. Nearly an hour before the end of the session, the phenomenon of “crawling” was clearly visible on the electronic board. All three orders to buy one real estate share of this broker were not matched. He executed the order to correct, then canceled to buy other shares.
Mr. Le Hai Tra, a member in charge of the Board of Directors of HoSE, said the maximum processing capacity of the HCM City bourse by design is 900,000 orders a day. Each securities company is equally allocated 3,000 reserve orders per day (currently 74/105 member securities companies are still in operation). The balance is allocated based on the average number of orders given by each company during the last 30 days, for example. Because the average number of orders of each member is different, securities companies with a large market share are distributed a lot and vice versa.
Last year and the beginning of this year, the average trading value of shares in HoSE averaged 4,000-5,000 billion VND per day, and by December 2020 increased to 14,000 billion VND. Design command processing capacity is maximized. Imagine HoSE as a giant stadium with a capacity of 900,000 people. In the past, there were few investors, few buy and sell orders, and everyone could buy tickets to comfortably enter the field during the match. Currently, investors participating in the market increase strongly, the order of purchase and sale is much, the organizers only sell 900,000 tickets (not including the number of tickets for abnormal incidents), who buys first in the yard, who comes later, out of tickets, don’t see.
So at the beginning of the day, investors scrambled to place orders to trade stocks. In the capacity limit, how much can the order get? Out of capacity, the system stops, and can no longer handle it. Order after “lying play” there.
If at the end of the morning session, but the transaction value on HoSE reaches 13,000 billion VND or more, the afternoon will be congested. HoSE’s maximum matched volume is now around 17,000 billion dong a day. The faster the order matching speed, the sooner the matching value reaches this level, the more time remaining is congested.
The number of people participating in stock investment continued to increase. In January 2021, more than 86,200 new securities accounts were opened, bringing the total number of securities accounts to 2.85 million, equivalent to 3% of the population. 3% is the low level in the region. In Korea, 30% of the population has stock accounts; China 15%. The proportion of the population with stock accounts of the ASEAN countries is double or triple that of Vietnam. In the near future, the proportion of Vietnamese people with stock accounts will increase.
HoSE is preparing to replace the new system with an investment of 30 million USD. The new system is used for both the HCM City floor, the Hanoi floor and the Custody Center. Because of Covid-19, the replacement of the new system was delayed, it would take the fastest three quarters of this year to operate. From now until then, stock trading keeps “stuck way”?
At the beginning of January 2021, HoSE applied to increase the minimum batch of shares from 10 to 100 units / order, the transaction value from 14,000 billion dong is now congested to 17,000 billion dong. According to the financial world, there are two solutions that are temporary until the HoSE has a new system.
Firstly, increase the minimum stock lot again from 100 to 1,000 units / order. The representative of HoSE calculated that this increase in lot could reduce the order volume by 30-40%, thus increasing the liquidity for stock trading. The difficulty is that retail investors will need more money to place a minimum order of 1,000 shares / order. No problem with stocks with low market value. But for stocks with market price equal to or greater than 100,000 VND, to buy 1,000 shares / order, investors must have in their accounts over 100 million VND. Not to mention, if investors plan to buy 1,000 shares, they will buy 200-300 units each time to ensure that they can buy the desired average price, and limit risks. Now buy 1,000 shares now, is to calculate carefully.
Mr. Le Hai Tra said a lot of 1,000 shares is not completely negative. Instead of self-investment, competition with organizations, retail investors can buy fund certificates, thereby promoting the development of the fund management industry that our country is in desperate need. Looking outside Singapore, in 2015, the new batch of shares changed from 1,000 to 100, Japan in 2018 agreed to batch to 100 units from many different levels, Taiwan (China) is still applying the 1,000 unit lot. .
The second temporary solution is to step up stock prices. Several years before the market quieted down, the securities management decided to split the price step down so that investors with very small capital could also participate. Now when stocks “jam the way”, they raise their prices again. For example, the market price of ABC shares is 13,000 VND, the current price step is 50 VND: 13,500 – 13,550 – 13,600 VND …. increase the price step to 100 VND: 13,500 – 13,600 – 13,700 … According to HoSE, step up prices may increase liquidity in HCMC floor by 15-20%.
Thus, combining the two above temporary solutions can help increase HoSE liquidity by about 50%, which means there is a possibility of a transaction value of VND 30,000 billion a day. At that time, we can evaluate more accurately and completely about the speed of the stock development as well as the mobilization of resources among the people.
There is also an opinion that if we let the stock “stuck in the road” continue, spend by shortening the trading time, encapsulating it in the morning to save time and effort of investors and society. . But it took many years for Vietnam to have the current market size, this is considered a “step backward”.