HoSE, HNX see many enterprises leave the market

July, 14/2022 - 08:04
Most of the delisting cases on HoSE and HNX were due to losses fore three consecutive years, the auditor's refusal to give an opinion, or the financial statements of three consecutive years with qualified options.
Investors watch stocks' movements. Photo vietnamplus.vn

HÀ NỘI — In June, both Hồ Chí Minh Stock Exchange (HoSE) and the Hà Nội Stock Exchange (HNX) did not have newly listed stocks. 

Since the beginning of the year, HoSE has only recorded five listed companies - EVN Finance JSC (EVF), Quang Tri Minh Hung JSC (GHM), Deo Ca Traffic Infrastructure Investment JSC (HHV), Power Generation Joint Stock Corporation 3 (PGV), and Viettel Construction JSC (CTR).

On HNX, there were only four new listed companies - Hoang Mai Stone JSC (HMR), Transimex Transport JSC (TOT), Saigon Plant Protection JSC (SPC) and most recently, Vietnam Herbs and Foods JSC (VHE).

However, after this year's audited financial statements season, many businesses on these two exchanges had to delist or be on the list of delisting.

In May, HoSE said that RIC shares of Royal International Corporation would be delisted due to losses in business results for three consecutive years (2019, 2020 and 2021). RIC then left HoSE on May 16.

Previously, the southern exchange also decided to compulsorily cancel the listing of PXI shares of Petroleum Industrial & Civil Construction JSC, due to losses for three consecutive years. Specifically, the company lost VNĐ30.3 billion (US$1.3 million) last year, while the audited financial statements for 2019 and 2020 showed that it lost VNĐ10.4 billion and VNĐ50 billion, respectively.

Similarly, Petroleum Equipment Assembly & Metal Structure’s PXS shares had to leave HoSE to trade on UpCOM, as the audit organisation had a qualified option with the company's financial statements for 2019, 2020 and 2021. It was in the case of securities being delisted according to Clause 1, Article 120 of Decree 155/2020. The last trading day of the stocks was June 23.

Some other cases were PTL of Victory Capital JSC and FTM of Duc Quan Investment and Development JSC.

On HNX, out of eight stocks, only SIC of SCI E&C cancelled listing because the current shareholder structure does not meet the conditions of being a public company under the new Securities Law.

The remaining seven cases delisted because their financial statements of three consecutive years (2019, 2020, 2021) received a qualified option or the auditor refused to comment on the financial statements.

After being kicked out of HoSE and HNX, these symbol tickers will be automatically traded on UpCOM to maintain stock liquidity. However, in the event that the reasons leading to the delisting cannot be resolved, these stocks will only be traded on Fridays until the consequences are rectified.

In case it does not meet the requirements of UpCOM, it will be transferred to an over-the-counter exchange (OTC) - a market where buyers/sellers trade by themselves, and the liquidity is often low.

The common point of the delisted stocks is that they all suffered sharp declines in prices, and many stocks were not traded. 

For example, after receiving information that it had to be delisted on April 14 until its last trading day on May 13, RIC shares fell nearly 13 per cent. Similarly, PXI tumbled 37.6 per cent, and PXS was down 23.1 per cent. VNS

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