From June 24, 2009, the Hanoi Securities Trading Centre (HASTC) was renamed to the Hanoi Stock Exchange (HNX). On this occasion, the stock exchange also launched the market for unlisted public companies (UPCoM). Mr Tran Van Dung, Director of the Hanoi Stock Exchange, held a press conference on this issue.
What benefits does UPCoM market bring to enterprises and investors?
The first objective of the UPCoM market is to widen the official market scope, narrow the free stock market and increase the State management over the stock market. Secondly, this is a place for unlisted companies to centrally trade their securities and to popularise their names, an important vehicle to raise funds for operation. The third and most important is to ensure the safety of transactions for investors.
When we initiated the opening and development of the UPCoM market three years ago, we envisaged the impulse of the UPCoM market to push up the listed market because UPCoM-listed companies would get familiar with new models of governance, information disclosure and investor relations. They only need another step to switch listing of their shares on the Hanoi Stock Exchange (HNX) or the Ho Chi Minh Stock Exchange (HOSE).
We pursued these objectives over the past three years and, under the instruction of the Government and the Ministry of Finance, the UPCoM market has gathered all necessary conditions to open. We do not want to delay the opening of this market because it should have launched nearly one year ago. However, at that time, we lacked legal regulations on holding percentage of foreign investors on the market.
How will UPCoM market operate and how will its index be calculated?
Investors will place negotiation deals at securities companies (there will be no order-matching trading on this market). Trading results are imported to UPCoM system to forward to the Vietnam Securities Depository (VSD) for payment. Investors can place orders to trade shares on the UPCoM market at anytime in securities companies which will send trading results to the trading system of the Hanoi Stock Exchange (HNX) from 10:00 a.m. to 11:30 a.m. and from 1:30 p.m. to 3:00 p.m. on business days to process payments.
According to the current rule, the payment term on the UPCoM market is T+3, or three business days from the trading date.
The measure of the UPCoM market is UPCoM-Index and its calculation method is the end-of-the-day price, the same as used in HNX-Index.
Why are trading reporting hours applied?
This is a very important matter because outstanding bids or offers in securities companies will be sent to the Hanoi Stock Exchange during the reporting period or trading hours. Prices on over-the-counter (OTC) market are very different in Hanoi or Ho Chi Minh City or even in securities companies. Investors will know the market context, best selling and buying prices during the reporting hours.
Such organisation will minimise short sales or “price fixing.” The market will have real trading and more public and transparent information about prices and demand/supply. Securities are obliged to quote the prices in trading deals. This is the best solution for market makers and investors when they know selling/buying prices.
In the first phase, 22 enterprises registered to join the UPCoM market. Could you give more information about them?
Among 22 enterprises registering to list on the UPCoM market, 10 had completed procedures to deposit their shares with the Hanoi Stock Exchange. Largest entities include Cafico Vietnam Joint Stock Company (with VND16.29 billion) and Viet Dragon Securities Joint Stock Company (330 billion). Five securities companies and five finance companies are the first to list shares on the UPCoM market.
Could you introduce development orientation of the Hanoi Stock Exchange from now to the end of 2010?
The orientation of the Hanoi Stock Exchange is to continue the current programme. After launching the UPCoM market, the stock exchange will approach enterprises to develop the UPCoM market. We expect many enterprises to join this market. Under the listed market consolidation and development programme, the Hanoi Stock Exchange will have 220-230 HNX-listed companies and 40-50 UPCoM-listed companies by the end of this year. In July or August, the stock exchange will also put the bond market into operation and debut online trading by the end of 2009 or 2010. The workload for the Hanoi Stock Exchange is quite large.
Reported by Mai Ngoc
Vietnamese
