Vietnam plans to open a derivatives market in the first quarter of next year in a bid to draw more investment to its capital markets, with futures contracts set to launch first, the Hanoi Stock Exchange said on Thursday.
The market will initially start with two main derivative products - stock index and government bond futures - and once fully operational, more instruments will be introduced, the exchange said.
The launch of the derivatives market is designed to support the country's stock market by providing more instruments to hedge risks and attracting more investors.
Le Ha, an analyst at Vietcombank Securities, said making more products available was a positive step. Gains would be gradual, but overall it could help Vietnam's efforts to become a viable emerging market, she said.
"This may also partially help shorten the process of upgrading Vietnam's stock market," she added.
The plan was approved in 2014 by then Prime Minister Nguyen Tan Dung and has been welcomed by experts and investors following feasibility studies. In Southeast Asia, Singapore and Thailand also have derivatives markets.
Vietnam's stocks are on the radar for frontier market investors, offering the region's second-cheapest stocks.
The combined market capitalisation of the country's two stock exchanges in Ho Chi Minh City and Hanoi are comparatively modest at around a sixth of Thailand's and a quarter of Singapore's.