No room for cheap share items on OTC trading floors

The list of commodities for the OTC market will not include cheap share items, experts say.
In anticipation of putting OTC shares into public transaction and under State management, securities companies are trying to get ready in terms of staffs and ‘commodities’ for the market.

Experts said that there would be no room for cheap share items on the OTC share trading floors. The list of commodity items for the OTC market, which has been prepared by securities companies, will include share items with high liquidity, good prices. These will be shares of companies which have good business results and operate in fields with high growth rates.

Nguyen Dinh Phong, Director of Investment Services Division under VnDirect, a securities company, said that VnDirect was making a list of share items to be put into transaction. Its staffs are now trying to get information about the share issuance institutions so as to give assessments on the risks and possible profit of OTC shares. Mr Phong said that VnDirect’s list would include 50 share items.

A representative from Vietcombank’s Securities Company (VCBS) said that VCBS’ list of share items would include items issued by public companies that authorise VCBS to manage shareholders’ books or by the companies for which VCBS has organised share auctions. Moreover, the list will also include share items of investors which have transaction accounts at VCBS.

Securities companies all said that they would select the ‘best sellers’, especially the shares of the companies operating in banking, telecommunications, real estate, pharmaceuticals, construction materials, seafood, rubber, wooden furniture processing and transport services.

According to Mr Phong, cheap share items with low liquidity will have no place on its company’s trading floor. “We know that we can collect fees from the transactions of these share items, but we care more about the quality of services we provide to clients,” he said.

As planned, OTC shares will be transacted on securities trading floors by the end of this year, after public companies register with the State Securities Commission (SSC). However, only around 200 companies of more than 1,000 public companies had registered by the end of May 2007.

As securities companies will offer transactions of OTC shares as well as transactions of listing securities, experts have warned that they will face a serious labour shortage.

In order to help settle the problem, SSC has recently decided that those who want to get a certificate to work in the stock market just have to pass the exam to be held by SSC, while there was no need to follow the three training courses provided by SSC’s Centre for Scientific Researches and Securities Training. It formerly took 2-3 years at least to finish the three courses and get a practicing certificate.

Source: VNE