Tuesday, December 10 2019

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UPCoM offers opportunities for market players

Update: November, 19/2019 - 08:01

 

According to the Hà Nội Stock Exchange (HNX), the monitor of the UPCoM, there are now 857 enterprises trading their shares on the UPCOM, with a total registered trading volume of over 41.7 billion shares, corresponding to the trading value of over VNĐ410.7 trillion (US$17.6 billion). — Photo thoibaokinhdoanh.vn

HÀ NỘI — Although the Unlisted Public Company Market (UPCoM) attracts less attention from investors than the Hồ Chí Minh and Hà Nội stock exchanges, the market still offers potential opportunities for market players who thoroughly understand it.

Booming scale

According to the Hà Nội Stock Exchange (HNX), there are now 857 enterprises trading on UPCoM, with a total registered trading volume of over 41.7 billion shares, corresponding to a value of over VNĐ410.7 trillion (US$17.6 billion).

As of the last trading day of October this year, the market capitalisation of UPCoM stood at more than VNĐ961 trillion.

At the same time, there were only 367 enterprises trading on the HNX, with total trading volume of more than VNĐ13.04 billion shares, corresponding to the trading value of nearly VNĐ130.4 trillion. Market capitalisation stood at more than VNĐ186.3 trillion.

The number of businesses trading on UPCoM is 2.3 times higher than the HNX and market capitalisation is five times higher.

There are also industry-leading companies trading on UPCoM, such as the Airports Corporation of Việt Nam (ACV) with a market capitalisation of nearly VNĐ170 trillion, the Việt Nam Engine And Agricultural Machinery Corporation (VEA) with more than VNĐ65.7 trillion, and Bình Sơn Refinery and Petrochemical Joint Stock Company (BSR) with more than VNĐ31 trillion.

The quality of UPCoM had improved, but the market had not received due attention from investors, except for large enterprises, Phan Dũng Khánh, director of the investment consultancy at Maybank Kim Eng Securities, told Việt Nam News Agency.

According to the HNX, what concerned investors was the limited transparency of information disclosure for UPCoM stocks.

At present, some UPCoM stocks are trading without matching orders for many consecutive days, which discourages investors from considering UPCoM as a potential market.

Opportunities

Nguyễn Văn Ngọc, an UPCoM investor, said the market had attracted new companies that could offer a lot of opportunities.

Low liquidity was UPCoM’s weakness, while UPCoM stocks were allowed to fluctuate between +/- 15 per cent. The figure on HOSE was only +/- 7 per cent and that on HNX was +/- 10 per cent, he said.

“When researching a particular stock, investors need to carefully read through company information and annual reports. Good fundamental stocks with strong business results will definitely go up,” Ngọc said.

According to Hoàng Thạch Lân, head of the individual investor division at Việt Dragon Securities JSC, UPCoM was a mixture of both well-performing and under-performing companies.

Some businesses had been delisted but retained public company status, or those who were not yet qualified to list on the Hồ Chí Minh and Hà Nội stock exchanges, Lân said.

When choosing an UPCoM stock, investors needed to track its trading process, measure liquidity and look at any abnormalities, if any, such as sudden increases or decreases in liquidity or price.

Currently, enterprises on UPCoM were only required to publish semi-annual and annual financial statements. They should also be asked to publish quarterly financial statements, Lân said. — VNS

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