Outside the Hồ Chí Minh Stock Exchange (HoSE) and Hà Nội Stock Exchange. The merger of the two trading bourses received positive responses at a National Assembly meeting on Thursday. — Photo baohaiquan.vn
HÀ NỘI — Merging the two national stock exchanges would improve efficiency and trading conditions, the 14th National Assembly heard at a meeting on Thursday.
According to a draft amendment to the Law on Securities, the existence of two exchanges in different cities had become outdated given Việt Nam’s efforts to take advantage of Industry 4.0 to strengthen the equity market.
“Merging the two exchanges and basing it in the country’s financial hub (HCM City) is the soultion,” the report said.
The proposed merger has stirred public concern over the past two years.
A number of experts and specialists have supported the idea, saying the merger would remove differences between the two exchanges. It would make requirements the same for companies on both trading bourses.
Besides, the post-merger exchange, which would be called the Vietnam Stock Exchange, would make trading conditions better for both domestic and foreign investors as there were now too many contrasts between the two bourses.
Listing requirements for the Hồ Chí Minh Stock Exchange (HoSE) are considered harder than those for the Hà Nội Stock Exchange (HNX).
If a company wants to list shares on HoSE, it must meet standards in terms of information disclosure, corporate transparency, charter capital and corporate governance.
It makes HoSE a reliable source for foreign investors if they want to look for a potential target among nearly 800 listed companies.
There are a number of companies who want to list on HoSE in order to lure more foreign capital.
Ceramics producer Viglacera and PetroVietnam Power Corporation (PV Power) are among the large-cap State-owned enterprises that have moved from HNX to HoSE in 2019.
National flag carrier Vietnam Airlines and the Airports Corporation of Vietnam (ACV) are planning to switch from the Unlisted Public Company Market (UPCoM) – a lower-level exchange on HNX – to trade on HoSE.
However, the report opposes the idea that the two exchanges would continue operating as two subsidiaries of the Vietnam Stock Exchange as it could create overlaps and problems for the Government in managing the three exchanges.
“That won’t guarantee the close market supervision the Government must have, especially when the market turns volatile,” the report said.
Minimum capital set at VNĐ30 billion
NA deputies on Thursday agreed with the draft law that the minimum charter capital of a public company should be tripled to VNĐ30 billion (US$1.29 million).
The increase would ensure more companies would survive on the market and individual investors were protected against trade fraud and market manipulation, Deputy Nguyễn Văn Dành said.
The comment followed the State Securities Commission’s penalties on illegal stock trading activities that had been discovered on the market.
One case involved the Central Mining JSC (MTM) where former leaders of the company took advantage of loose listing conditions on UPCoM to manipulate the firm's shares, earning VNĐ56 billion in illegal profits.
Data shows 81.04 per cent of public companies in Việt Nam had charter capital of VNĐ30 billion or more. Therefore, the hike to required minimum charter capital for public companies would have little impact on the majority of public firms. — VNS