Nation's bourses may merge

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The two stock exchanges could be combined to form a comprehensive technology platform, said Le Hai Tra, a member of the board of the Ho Chi Minh Stock Exchange.

"Two technology systems exist to serve the same purposes," said Tra. "A merger will help save enormous costs."

The State Securities Commission is developing a new system which would make fundamental changes in the securities infrastructure and avoid waste. Deployment of the new system is complex and required ongoing consultation with foreign experts. But, Tra said, "if the merger is critical, this system can be ready."

A merger would help the Vietnamese stock market improve its competitiveness among regional stock markets.

"The restructuring of both bourses must be put in the context of a regional competitive scenario," Tra added. "No neighbouring countries have two separate exchanges as in Vietnam ."

But some securities analysts have argued that the merger would create a monopoly and frustrate investors who want to maintain investments on two separate exchanges. They argue that the establishment of a holding company would help focus management functions on a single entity, while allowing each bourse to continue operating independently, avoiding major disruption or volatility on the market.

Hanoi Stock Exchange deputy director Nguyen Thi Hong Loan backs the holding company approach.

"The market should be retained as is for the next four years to avoid disturbances," she said.

But Son said that the current model keeps share, bond and derivatives markets separate, scaring investors away. Merger of securities exchanges for operational efficiency is now a common trend worldwide, he said.