|The HSX was originally built thanks to Thai technology. Photo: Le Toan |
Last week, Minister of Finance Ho Duc Phoc requested the ministry (MoF) to urgently carry out an inspection of the Ho Chi Minh City Stock Exchange (HSX) over prolonged overload technical issues.
On June 10, the MoF signed Decision No.81/QD-TTr on administrative inspection for the exchange. “Based on the current situation of the COVID-19 outbreak in the city, the inspection team will have a specific work plan in line with the regulations on pandemic prevention and control,” the MoF said in a statement.
HSX’s trading overload and its temporary shutdown have been the subject of controversy over the past few months. Within a few hours on June 9, HSX headquarters on Google Maps was inundated with more than 1,500 1-star reviews, lowering the average score to 1.1, coming mainly from local mom-and-pop investors.
On June 11, the Vietnam Association of Financial Investors (VAFI) proposed the MoF to clarify the major reasons behind HSX’s trading infrastructure incompetence.
“The Stock Exchange of Thailand (SET) and Korean Exchange (KRX) could not build their own trading infrastructure at first, and they had to purchase and import technical support from outside. However, they quickly adapted the technology and mastered it. Not only that, they are now eligible to sell software to other partners such as HSX in Vietnam,” VAFI commented.
“Vietnam is proud of itself as a powerhouse in IT, buy this doesn’t explain why every time any problems arise at the HSX, we need Thai experts to solve them,” the organisation questioned.
Vu Bang, former chairman at the State Securities Commission (SSC), said in an interview, “The HSX tech is imported from Thailand, so basically only Thai experts know how to handle it. When I was the chairman of the SSC, I had to call for Thai experts to fix technical problems.”
Moreover, the local stock market has witnessed a flood of individual investors recently, and excessive liquidity has seriously hampered the trading platform. “Even if investors criticise or express their anger, the market will not be able to operate smoothly right away,” Bang added.
On June 9, HSX notified securities companies on upcoming implementation of a new infrastructure system for the entire stock market, which is imported from the KRX, based on a $26.1 million contract between HSX and KRX made in 2012.
HSX will send technical specifications to securities companies this week. In early August, there will be functional testing. In these two testing phases, securities companies will be connected to the HSX’s new system to gain experience. However, COVID-19 outbreaks have exerted more pressure, and South Korean experts have not been able to travel to Vietnam.
“Why did HSX not opt for Vietnamese contractors? In that way, if there were any problems, Vietnamese companies could quickly deal with them without depending on foreign experts,” VAFI said.
In terms of KRX’s fresh adoption, VAFI requested the MoF to clarify the reason why the project has been delayed since the deal was made in 2012. Inspectors should also find out if the project value has increased compared to its initial plan, and what caused the project value to increase, if at all.
“The SET and KRX are stock exchanges and they do not specialise in IT. They have talented IT experts, but they would keep their own systems running smoothly as the top priority, not the infrastructure of others. Therefore, when purchasing foreign trading software technology, HSX must ensure how to deal with arising errors,” VAFI said.