Gen Z can be key to stock market advance

According to a report by Techcom Securities (TCBS) presented at a seminar in late July on Vietnam’s stock market, 56 per cent of new account openings at TCBS in the first half of this year were from investors under 30 years old.

Gen Z can be key to stock market advance, illustration photo/ Source: freepik.com

“The number of young investors is increasing significantly, and the investment value from this group is substantial. While some have modest capital, many possess accounts worth tens or even hundreds of thousands of US dollars. Many young investors receive assets from their parents to participate,” said Nguyen The Minh, head of Research & Development for Retail Clients at Yuanta Securities Vietnam.

In addition to professional young investors, the market also includes semi-professional investors who may lack experience and the skills to diversify their portfolios and mitigate risk. “Among these semi-professional investors, a significant portion are young individuals aged 20-35 who prefer to invest in fund certificates, relying on experienced professionals to manage investments for saving and asset growth,” said Nghiem Xuan Huy, chairman of Vina Securities.

Nguyen Thi Thu Hien, CEO of TCBS, said Gen Z investors quickly adapt to technological platforms and act swiftly in their transactions, taking responsibility for their actions.

“This drives TCBS and other securities companies to introduce tech products that help young investors enter the market efficiently,” Hien said. “Gen Z investors could use TCBS’ blockchain for bond registration, employ robot advisors for asset allocation, and rely on AI for investment suggestions.”

According to a 2023 report by the General Statistics Office, Vietnam is currently in a golden demographic period, with the working-age population accounting for approximately 70 per cent of the total population.

It forecast that the demographic structure will last until 2041, presenting an opportunity for the country to boost economic and social development, enhance consumer demand, and strengthen production. The stock market will also benefit from this demographic-driven momentum.

This driving force will not only be short-term but will extend for the next two decades, similar to the baby boomer period in the US, which saw over 109 million children born over 27 years, according to Phan Linh, founder and chief Research Officer at Take Profit Investment Holdings.

“As these children grew up and entered the spending phase, consumer demand surged, propelling the US economy and stock market. We can reference this for Vietnam’s stock market during its golden demographic period,” said Linh.

He noted the unique learning and spending habits of Gen Z, who inherit the saving habits of Gen Y and their grandparents but also aim for financial freedom and prefer sustainable investment channels. He offered two recommendations for leveraging this investor generation to develop Vietnam’s stock market.

“Firstly, it is to create a transparent and professional investment environment that supports sustainable growth. This largely depends on the changes and improvements in policies and regulations regarding transactions, payments, and market information. The immediate goal is to meet conditions and strive for the stock market’s upgrade in 2025,” Linh explained.

“Second is disseminating knowledge about the stock market and professional investment methods. Introducing financial and economic lessons in high school curriculums can help people understand investment channels better,” he added.

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