Vietnam's benchmark stock market index hit a fresh record high on Thursday, topping the 1,500 point mark for the first time and defying a slump across most other Asian equity markets.

The small frontier market has risen 36% this year and analysts heralded the new high, driven by banking and real estate shares, as an "unprecedented moment".

"In June, given the COVID-19 situation, the rosiest scenario we could think of is a year-on-year gain of 30% for the VN Index in 2021, targeting 1,500 level by year end," said an analyst at VNDirect Securities.

Vietnam, consistently one of Asia's fastest-growing economies, had been badly hit by the coronavirus, which disrupted its supply chains and hit workers in key industries.

Vietnam's GDP  contracted 6.17% in the third quarter of 2021, the sharpest quarterly decline on record, although the government expects GDP to expand 6.0% to 6.5% next year.

The rush to the stock market was driven partly by investors looking to park their cash as other investment opportunities have been stifled by the crippling economic impacts of COVID-19, said some analysts.

"Due to the impacts of the COVID-19 pandemic, the economy's capability to absorb investment funds has declined significantly, and therefore investors have chosen to put their money in the stock markets," an analyst with PetroVietnam Securities Inc. said.

"Investors will wait until at least the pandemic to be under control to withdraw funds from the stock markets for their other investment options."

Vietnam's main index has a market capitalisation of nearly $247 billion, about half of the value of its counterparts in Indonesia and Thailand, the region's biggest economies.

Around 1.1 million new stock trading accounts were registered in Vietnam during the past ten months of this year, higher than the whole year figure of 2020, official data showed.

The government said new trading system would be launched to replace the current overloaded one in the second quarter next year to keep up with the large influx of investors.

($1 = 22,670 dong)

(Editing by John Geddie)