Bourse does equitisation shuffle

The Ho Chi Minh City Securities Trading Centre (HoSTC) will undergo some major changes as it transforms into a limited liability company, said the bourse’s Director Tran Dac Sinh.

The restructuring is part of a long-term plan to equitise the stock exchange by 2010, the exact timing of which will be determined by senior Government officials. Bourse officials are trying to complete the switch to a limited liability company by the end of July.

One of the more noticeable alterations besides a new name – the Ho Chi Minh City Stock Exchange (HOSE) – will be the new control structure. The bourse will no longer be a branch of the State Securities Commission, but act as an independent company under the securities and enterprise laws.

The exchange will be able to issue its own rules and regulations, and take charge of market enforcement.
”Listed companies and members taking part in the market have to comply with our rules, any violators will suffer the consequences,” said Sinh.

Secondly, the exchange will be able to manage its finances and human resources more independently.

Currently, HoSTC spending is tied to the State budget, while bourse executives have to wait for Government approval on various operations, including hiring staff.

The HOSE will continue to collect dues from brokerage fees to selling its Securities Market Bulletin. This year, the HoSTC expects to collect around 150 billion VND (9.3 million USD) in fees, doubling last year’s figure.

Companies wanting to hold an initial public offering or already listed on the exchange will still have to meet strict standards already laid out by the bourse, said Sinh.

For example, companies must have at least 80 billion VND (4.98 million USD) in charter capital. HoSTC executives will likely lift the threshold in the near future. “In principle, we will maintain the stock exchange’s image as a place where the economy’s largest, most efficient companies are listed,” said Sinh.

“We will try to make enterprises understand that to list is to be selected. Not all companies who want to list will make the cut.”

In the future, the HOSE intends to enter joint ventures with foreign bourse.
“We have already signed co-operation agreements with many foreign stock exchanges, mainly in terms of training and technical support and supplying information technology,” said Sinh.
Greater tie-ins with regional bourses will help companies wanting to raise foreign capital by issuing stock abroad, said Sinh, with overseas firms just as easily coming to Viet Nam.

In terms of trading, the restructuring will not have a major impact on the market, though regulators are preparing for the new electronic order matching system on June 4.

HoSTC Deputy Director Le Hai Tra said the centre is awaiting Ministry of Finance and State Securities Commission’s approval to deploy the new trading system.

Source: VNA