HoSTC stock matching plan gets extra lift wings

Pressure will fall on retail investors to increase their volumes

The continuous order matching method will apply from 9am-10am, while periodic order matching sessions will take place from 8.30am-9am. The daily price variation limit will remain at 5 per cent.
“The application of continuous order matching will help increase the successful matched transactions of investors and minimise stock price manipulation,” said Duong Ngoc Thao, director of Tan Viet Securities Company’s Ho Chi Minh City branch.
The continuous order matching method is, however, considered complicated by Vietnamese investors. As a result, the centre would postpone applying a ‘market price’ order, according to the HoSTC website.
The ceiling price increase for stocks and fund certificates at debut on the HoSTC is regulated at 20 per cent of their initial price, a limit designed to prevent speculators from manipulating prices. After the first day’s trading, the daily limit is 5 per cent.
The Binh Duong-based Thuan An Wood Processing Joint Stock Company (GTA) is the first firm subject to the debut price limit when it floats its 8.4 million shares, at an initial cost of VND55,000 each, on July 23.
Large numbers of retail investors maybe forced out of Vietnam’s securities market if they fail to trade a minimum volume of 100 shares from the start of 2008 because the HoSTC has raised the minimum trading lot from 10 to 100 shares.
“The HoSTC will enforce this rule [of minimum trading] five months after the continuous order matching is put in place in order to give retail investors time to increase their share holdings or sell out,” said Tra.
The application of the continuous order matching method has been delayed three times since April this year, primarily because securities companies have asked for more time to improve their technical infrastructure and staff training.
At present, the HoSTC is using a periodic order matching system. It allowed order matching once a day when it first launched in July 2000, two trading sessions a day from 2003 and three trading sessions daily from mid-June 2006.
The exchange is now a one-member limited liability company with registered capital of VND1 trillion ($62.5 million).