Making news

Derivatives pick up in October but signal slowdown in short term

The Vietnamese derivatives market has picked up over the last three weeks, with total trading volume nearly reaching the total figure recorded in September.

As of October 18, a total of nearly 1.04 million futures contracts had been transferred on the derivatives market, which is under the management of the Hanoi Stock Exchange (HNX).

Total trading value since the beginning of October has reached nearly 95.7 billion VND (4.1 million USD).

The figures almost match the numbers hit in September, which were 1.13 million futures contracts and 102.2 billion VND in trading value.

Both trading volume and value on the derivatives market slipped between July and September before picking up in the last three weeks.

Data on the HNX shows that trading volume fell from nearly 2.3 million contracts in July to 1.7 million in August and 1.13 million in September.
During the same time, trading value went down from 202.36 billion VND to 149 billion VND and 102.2 billion VND.

According to HCM City Securities Corp (HSC), fluctuations on the derivatives market had matched the volatility of the common stock market.

Market movements had been complied by the unpredictability of global stocks markets, and weighed down by trade wars and worries about the global economic recession.

After picking up this month, trading showed signs of halting as only 49,621 contracts were traded on October 18, worth 4.57 trillion VND.

That was the lowest figure recorded this week.

Four VN30 futures ended October 18 in negative territory. The VN30F1911 futures, which matures in November 2019, fell 2.9 points to 921.40 points.
VN30F1912, VN30F2003 and VN30F2006, which mature in December 2019, March 2020 and June 2020, lost between 1.5 points and five points to finish the week at 919.20-920.60 points.

The underlying index – the large-cap VN30-Index – inched up only 0.03 point to finish at 919.13 points.

The data suggested VN-30 futures would not make big jumps in the short term, HSC said.

The large-cap VN30-Index had stayed around 920 points this week with declining liquidity, which was below the 20-day average, proving buyers were being cautious about their decisions at the moment, VNDirect Securities Corp (VNDS) said in its daily report.

If trading remained modest, the VN30-Index would move narrowly, making the futures unattractive to investors and suggesting they stay out of the market to wait for clearer signals, VNDS said.