‘Third floor’ to trade shares

The Hanoi bourse has expressed its concern over the move

Nguyen Son, deputy head of the SSC’s Securities Market Development Department, said a “third floor”, apart from the Ho Chi Minh City and Hanoi securities trading centres, will be set up for unlisted equitised firms.
He said securities companies will be the bridge for transactions of unlisted joint stock firms’ shares, with the SSC supervising their transactions.
This means that investors who want to find shares of unlisted joint stock firms could easily purchase and sell the shares and their transactions will be officially accepted by the government.
Such transactions haven’t been considered legal so far, though in reality the acquisition and sale of shares of unlisted firms has been more active and exciting than shares listed on official markets at the Ho Chi Minh City and Hanoi Securities Trading Centres.
Experts said with the SSC’s approval on formulating an official transaction floor for shares of unlisted firms, the market capitalisation of Vietnam’s securities market will be several times higher than it is now.
SSC figures show that so far 44 companies listed on both the Ho Chi Minh City and Hanoi Securities centres have pushed the market capitalisation of shares to around VND19 trillion ($1.2 billion), equal to just 2.5 per cent of GDP.
According to experts, now that transactions on shares of unlisted firms are allowed, the market capitalisation of the entire market could reach several times higher than the current level.
So far more than 2,000 state-owned enterprises have been equitised, but just less than 2 per cent are listed on the Ho Chi Minh City and Hanoi bourses.
Shares of hundreds of equitised companies are illegally sold and bought on the floating market.
Several securities companies applauded the move, saying the securities market will become more attractive and offer more choices for investors.
However, Tran Van Dung, director of the Hanoi Securities Trading Centre, was worried.
“A legal framework should be quickly established for such unofficial transactions that haven’t complied with rules on commissions or financial transparency,” he said.
He also predicted that the SSC will find it difficult to control such transactions.
As a result the market could become confusing and securities companies will end up paying more attention to the transactions of shares of unlisted firms instead of shares listed on Ho Chi Minh City and Hanoi bourses.



No. 751/March 6-12, 2006