(Bloomberg) -- A dizzying rally in Vietnamese brokerage shares this year is likely to continue as lower domestic borrowing costs boost retail participation in the stock market.

Some broker stocks have risen multifold, making them among the best performers on the benchmark Vietnam Stock Index, which is up some 20%. SSI Securities Corp., the country’s second-biggest brokerage, has more than doubled, while VNDirect Securities Corp. surged 87% through Wednesday’s close.

A recovery in the country’s equity market and four policy rate cuts by the central bank this year have boosted retail demand for share trading. The number of new brokerage accounts increased by 25% on-month to 188,298 in August, according to data from Vietnam Securities Depository and Clearing Corp.

“The banking sector has been reducing deposit rates which has led retail investors to focus on investing in the stock market,” and this is positive for the brokerage sector, said Ruchir Desai, a co-fund manager of the AFC Asia Frontier Fund. 

Broker shares slid on Thursday, tracking a broader selloff across Asia Pacific. Still, they remain at elevated at multi-year highs. 

Part of those gains is because Vietnam is the first in the region to cut interest rates while global central banks are still grappling with a higher-for-longer mantra. A State Bank of Vietnam official said this week the central bank will continue to ease policy to bolster the economy and order banks to lower rates. Relatively strong economic growth may also help support sentiment among local investors. 

Still, some investors warn that valuations are looking a bit stretched after the recent rally, which may trigger a bout of profit-taking in the near term.

“If you believe that Vietnam’s structural long term economic growth will translate into a more robust capital markets industry, then brokerage names are a good proxy,” Desai said.

©2023 Bloomberg L.P.