A PV Oil gas station. The company is trading shares on the Unlisted Public Company Market (UPCoM) with code OIL. (Photo: pvoil.com.vn) Hanoi (VNS/VNA) - Margin lending may be allowed on the Unlisted Pubic Company Market (UPCoM), the State Securities Commission (SSC) vice chairman Pham Hong Son has said.
The Hanoi Stock Exchange (HNX) must make a list of stocks on UPCoM that are qualified for margin lending and submit the list to the SSC next week, he said at a meeting with investment funds and securities firms.
The proposal will have to wait for the Ministry of Finance’s approval, the vice chairman added.
The Vietnamese stock market has been struggling in the last two months as fears about the spread of the novel coronavirus (COVID-19) have dampened investors’ confidence in risky assets.
If the margin-lending proposal is approved, it would be a boost for the secondary market, according to the SSC.
Brokerage and investment firms in recent media reports have expressed the idea that the market regulator should allow investors and brokers to use margin lending.
Margin lending and other financial leverage activities, which have been forbidden on UPCoM since the market’s opening in mid-2009, as the rules on UPCoM are less strict than those on the Ho Chi Minh and Hanoi stock exchanges.
There have been several cases in which UPCoM-traded companies’ leaders are charged with stock price manipulation, causing losses for investors.
In recent years, many large-cap companies that are good enough to list shares on the two stock exchanges have debuted on UPCoM, such as the Airports Corporation of Vietnam (ACV), Viettel Global, the Vietnam Engine and Agricultural Machinery Corporation (VEAM), the Vietnam Rubber Group, Masan Consumer, the Investment and Industrial Development Corporation (Becamex), Binh Son Refining and Petrochemical Corporation (BSR), FPT Online, PetroVietnam Oil, Masan MeatLife and Viettel Post.
The companies’ shares reacted well to the news. ACV and FPT Online shares jumped 4.3-4.6 percent on March 5, while shares of Viettel Global, PetroVietnam Oil and VEAM gained between 0.8 percent and 1.5 percent.
The secondary market tracker UPCOM-Index inched down 0.16 percent to end Thursday at 55.45 points. The index has lost a total of 1.37 percent since the market’s post-Tet (Lunar New year) reopening on January 30.
The benchmark VN-Index on the Ho Chi Minh Stock Exchange has plunged a total of nearly 10 percent in the same period while the HNX-Index on the Hanoi Stock Exchange has shed about 8.23 percent./.
VNA
