14 years of strong transformation

After more than a decade of formation and development, the commodity trading market in Vietnam has made great strides, increasingly affirming its position on the international map. From the first challenging steps, the market has grown strongly, expanding not only in scale but also in quality and influence. The birth and development of the market is not only an important turning point in promoting the economy but also a testament to Vietnam's innovation and strong integration into the global economy.

Vibrant transactions, attracting investment cash flow

The year 2024 witnessed strong fluctuations in the global raw material market. Prices of many commodities "raced" to set new peaks, creating great challenges for the commodity trading market. However, the commodity trading market in Vietnam remained stable and reached many new milestones.

Established on September 1, 2010, as the first national-level Commodity Exchange in Vietnam, the Vietnam Commodity Exchange (MXV) has affirmed its pioneering role in organizing the commodity trading market in Vietnam in a transparent, professional and effective manner; realizing the goal of becoming the leading Commodity Exchange in the region.

According to data from MXV, in the first 8 months of 2024, nearly 5,000 new trading accounts were opened, bringing the total number of accounts in the market to nearly 35,000. Cash flow continuously poured into the market, helping the average transaction value reach more than 5,000 billion VND/day. Of which, on April 19, MXV recorded the largest transaction value in Vietnam to date, reaching nearly 11,000 billion VND.

Mr. Dang Viet Hung, General Director of MXV said: “After 6 years of being allowed by the Ministry of Industry and Trade to connect transactions with the world, the market has been “untied” and has made strong development steps. With the orientation of self-reliance in technology infrastructure, MXV has continuously upgraded the trading system, improved automation features, helping businesses and investors improve efficiency when trading with the world. The M-System is evaluated by international experts as one of the best platforms for commodity trading in the region. The system can handle transaction volumes dozens of times higher than present, while still ensuring stability and smoothness.”

Mr. Dang Viet Hung - General Director of Vietnam Commodity Exchange (MXV)

In 2021, commodity trading was mainly a playground for large investors because the margin level of standard futures contracts was very high. At times, the commodity with the lowest margin at MXV also required an investment capital of over 30 million VND/contract. However, since MXV launched trading of mini and micro energy contracts from November 2021, commodity trading has become more suitable for accounts with small capital. This has helped commodity trading become a more popular investment channel, attracting cash flow to the market.

"The trading results of domestic enterprises and investors are getting better and better, as a result of a process of forming and developing the market in a systematic, large-scale and professional manner. MXV's Board of Directors has planned the development of the market plan very early with clear goals; focused and key points; closely following medium and long-term strategic goals; fully exploiting the potential but still emphasizing the safety and sustainability of the market," Mr. Dang Viet Hung added.

Strong market network development

To organize a professional and large-scale market like today, the contribution of 32 market members is extremely important. With a network of offices and branches spread across provinces and cities across the country, MXV members have brought the commodity trading market closer to businesses and investors in Vietnam.

Since 2023, in addition to announcing quarterly brokerage market share, MXV has widely published the ranking of market members on mass media. This ranking is one of the international standards of the commodity market, applied by many major commodity exchanges in the world. This is an important milestone, marking the professionalization of the commodity trading market in Vietnam, in line with the development trend of major markets around the world.

Outstanding Business Members of 2023

Along with that, MXV constantly focuses on improving the quality of market members' activities through a series of intensive training programs. The training sessions not only provide specialized knowledge about the market but also update the latest information about trading products, technology application skills, risk management, etc. Thanks to these programs, members not only improve their competitiveness but also actively contribute to the sustainable development of the commodity trading market in Vietnam.

Training work goes into practice

Recognizing the importance of standardizing and updating knowledge according to global trends, MXV has actively received opinions from experts and investors to develop training programs suitable for the Vietnamese market. According to data from the MXV Scientific Research Center, as of August 2024, nearly 1,500 trainees have been granted certificates of completion of periodic training courses. These training courses are held regularly every month, attracting the participation of members, brokers, and investors from all over the country.

MXV's training program stands out with its team of leading lecturers and experts in the field of commodity trading, providing in-depth and updated knowledge, helping students grasp and respond effectively to market fluctuations. The content of the training courses is modified, divided into basic and advanced modules, meeting the needs of different groups of subjects such as individual investors, brokers, and managers. In addition to optimizing the duration of the course, the courses are also designed to minimize costs, suit each participant, ensure training quality and create favorable conditions for all members participating in the market.

Training program "Derivatives Portfolio Risk Management" with speakers from leading experts from Singapore

Not only focusing on improving the skills of brokers and investors currently operating in the market, MXV also pays special attention to training human resources for the future, to ensure the sustainable and stable development of the commodity trading market in Vietnam.

Over the years, MXV has promoted cooperation with leading universities and economic institutes to carry out useful activities for students, including organizing seminars and scientific discussions on commodity trading, as well as jointly organizing short-term and long-term training courses. These activities aim to create high-quality human resources with solid professional knowledge and excellent professional skills.

In addition, MXV also cooperates with universities and academies to organize seminars and practical competitions on commodity trading. This is an opportunity for students to learn more about the market as well as connect with commodity experts at leading organizations in the world, thereby being imparted extremely practical and useful experiences and lessons.

Building specialized commodity exchanges

In addition to the goal of developing trading scale, since 2023, MXV has focused on researching and creating the foundation for building specialized Commodity Exchanges for Vietnam's strong products such as coffee, rubber, electricity, etc. This is one of MXV's key plans in the period 2023 - 2028, helping to develop the commodity trading market in Vietnam according to international standards.

“Specialized commodity exchanges will help solve many problems for each specific commodity. But in general, they will help Vietnam's production and trade activities become transparent and modern, creating the premise for breakthrough development in the future. MXV will actively coordinate with partners to gradually put specialized commodity exchanges into operation,” Mr. Dang Viet Hung affirmed.

After a long period of research and cooperation, MXV and the Vietnam Rubber Industry Group (VRG) have entered the testing phase of the Vietnam Rubber Exchange system. In the third quarter of 2024, MXV and VRG will coordinate to complete the processes and regulations for trading Vietnamese rubber products. It is expected that in the fourth quarter of 2024, this item will be officially listed and traded.

Conference to introduce and collect opinions on the Rubber Exchange organized by MXV and Vietnam Rubber Industry Group on June 28, 2024

The Rubber Exchange will help make buying and selling prices transparent and public; help businesses expand and create more connections in the industry; enhance the reputation and quality of Vietnamese rubber products. Modern, fast and accurate trading methods will gradually help the domestic rubber market catch up with the development speed of the world market.

In addition, since August 2023, MXV has coordinated with the Department of Industry and Trade, the Department of Agriculture and Rural Development, and other departments in Ho Chi Minh City to build the Ho Chi Minh City Pork Exchange. Mr. Dang Viet Hung said: “This Exchange model with modern technology and operation is expected to help both farmers and consumers avoid price manipulation, protect their interests; improve food hygiene and safety. At the same time, the scale of the livestock industry in Ho Chi Minh City will gradually go into depth”.

Enhancing position through international cooperation

To enhance Vietnam's position in the international commodity trading market, MXV has actively cooperated with partners who are the world's leading Exchanges, technology and financial corporations. This is clearly demonstrated through visits and work between partners and MXV to discuss cooperation strategies to develop the commodity trading market in Vietnam. The partners all affirmed that Vietnam is the fastest growing commodity trading market in the region, and acknowledged that this success is the result of MXV's methodical and professional organization of activities.

Since 2023, MXV and the Chicago Mercantile Exchange (CME Group) have agreed on a strategy to develop human resources that meet international standards for the commodity trading market in Vietnam through the organization of annual specialized seminars. Accordingly, CME Group has sent the world's leading experts to share and update the latest information and trading trends in the world commodity trading market to all experts, businesses, and investors at home and abroad. At the same time, CME Group representatives have also had active working sessions with the Ministry of Industry and Trade to plan development strategies as well as share and consult on the legal framework to facilitate market development.

In addition, in April 2024, MXV visited and worked with major commodity exchanges in China, including the Dalian Commodity Exchange (DCE), the Shanghai Futures Exchange (SHFE) and the Shanghai Gold Exchange (SGE). The partners affirmed that with the Vietnam-China bilateral relationship being comprehensively promoted by the two governments, cooperation with MXV will be a key strategy of the commodity exchanges in China in the coming time. In particular, with its position as the leading exchange in the world's largest pork production market, the DCE has supported and shared experiences so that MXV can organize and operate the pork exchange in Ho Chi Minh City well.

MXV delegation visited and worked at Dalian Commodity Exchange and major exchanges in China from April 23-26, 2024

Perfecting the legal corridor, the key to promoting the market

Compared to the 14 years of its establishment, the commodity trading market has only really developed since 2018. Decree 51/2018/ND-CP has removed the most important bottleneck by allowing the Vietnamese market to trade in conjunction with Exchanges around the world. This is a turning point that helps trading activities become transparent and professional, attracting huge investments from domestic businesses and investors.

The fact that the Vietnamese goods market has entered the global arena in the context of increasingly deep economic integration means that it is ready to face many challenges. In a market connected to the whole world, the policies set out need to keep up with global developments. In addition, policy synchronization is also an inevitable requirement, not only in the regulations on the organization of MXV activities but also in other related ministries and branches such as tax policies, accounting regimes, regulations on foreign exchange management or support policies for businesses participating in raw material price insurance.

"As a State management agency related to commodity trading activities, the Ministry of Industry and Trade always closely follows activities to have timely policies with market developments, in accordance with the provisions of Vietnamese law and international practices, but still ensures State management of this activity," said Mr. Dang Viet Hung.

Working group of Ministry of Industry and Trade periodically inspects the operation situation at MXV

Currently, the Ministry of Industry and Trade is developing a new Decree to replace Decree 158/2006/ND-CP and Decree 51/2018/ND-CP. This Decree will be adjusted to suit reality so that commodity trading activities are truly "unleashed" and develop in line with the market's potential, serving as a launching pad to help the Vietnamese economy reach regional and international levels.

Source: https://congthuong.vn/thi-truong-giao-dich-hang-hoa-tai-viet-nam-14-nam-chuyen-minh-manh-me-342445.html