Outside the Ho Chi Minh Stock Exchange (HoSE) and Hanoi Stock Exchange (Photo: baohaiquan.vn) Hanoi (VNS/VNA) - Mergingthe two national stock exchanges would improve efficiency and tradingconditions, the 14th NationalAssembly heard at a meeting on June 6.
According to a draftamendment to the Law on Securities, the existence of the twoexchanges in different cities had become outdated given Vietnam’s efforts totake advantage of Industry 4.0 to strengthen the equity market.
“Merging the two exchangesand basing it in the country’s financial hub (Ho Chi Minh City) is the solution,”the report said.
The proposed merger has stirredpublic concern over the past two years.
A number of experts andspecialists have supported the idea, saying the merger would removedifferences between the two exchanges. It would make requirements thesame for companies on both trading bourses.
Besides, the post-mergerexchange, which would be called the Vietnam Stock Exchange, would maketrading conditions better for both domestic and foreign investors as there werenow too many contrasts between the two bourses.
Listing requirements for theHo Chi Minh Stock Exchange (HoSE) are considered harder than thosefor the Hanoi Stock Exchange (HNX).
If a company wants to list shareson HoSE, it must meet standards in terms of information disclosure, corporatetransparency, charter capital and corporate governance.
It makes HoSE a reliable sourcefor foreign investors if they want to look for a potential target amongnearly 800 listed companies.
There are a number of companieswho want to list on HoSE in order to lure more foreign capital.
Ceramics producer Viglacera andPetroVietnam Power Corporation (PV Power) are among the large-cap State-ownedenterprises that have moved from HNX to HoSE in 2019.
National flag carrier VietnamAirlines and the Airports Corporation of Vietnam (ACV) are planning to switchfrom the Unlisted Public Company Market (UPCoM) – a lower-level exchange on HNX– to trade on HoSE.
However, the report opposes theidea that the two exchanges would continue operating as two subsidiariesof the Vietnam Stock Exchange as it could create overlaps and problems forthe Government in managing the three exchanges.
“That won’t guarantee the closemarket supervision the Government must have, especially when the marketturns volatile,” the report said.
NA deputies also agreed that theminimum charter capital of a public company should be tripled to 30billion VND (1.29 million USD).
The increase would ensure morecompanies would survive on the market and individual investors were protectedagainst trade fraud and market manipulation, deputy Nguyen Van Danh said.
The comment followed the StateSecurities Commission’s penalties on illegal stock trading activities thathad been discovered on the market.
One case involvedthe Central Mining JSC (MTM) where former leaders of the company tookadvantage of loose listing conditions on UPCoM to manipulate the firm's shares,earning 56 billion VND in illegal profits.
Data shows 81.04 percent ofpublic companies in Vietnam had charter capital of 30 billion VND or more.Therefore, the hike to required minimum charter capital for publiccompanies would have little impact on the majority of public firms.-VNS/VNA
VNA
