Ho Chi Minh City Securities Trading Center

Ho Chi Minh City Securities Trading Center (HSTC) in Ho Chi Minh City, Vietnam was established in July 2000. It is an administrative agency of the Vietnam State Securities Commission, and manages Vietnam's securities trading systems.

The Stock Trading Center of Vietnam (‘STC’), located in Ho Chi Minh City, was officially inaugurated on July 20, 2000, and trading commenced on July 28, 2000. Initially, two equity issues were listed, Refrigeration Electrical Engineering Joint Stock Corporation (‘REE’) and Saigon Cable and Telecommunication Material Joint Stock Company (‘SACOM’). As of this date, an additional 20 issues are also listed with a current market capitalization of US$239m.

The Stock Trading Center of Vietnam is also the official mechanism through which new government bonds are issued, and it functions as the secondary market for a number of existing bond issues. As of this date there are 120 listed bonds with a total market capitalization of US$866m. All securities traded on the Stock Trading Center of Vietnam are denominated in Vietnamese Dong. Par valued is standardized at VND10,000 for equities and VND100,000 for bonds. Trading is conducted daily with two matchings in a morning session, from 9A.M. to 11A.M.

The State Securities Commission (‘SSC’), a body established formally in 1996, is responsible for capital markets development, licensing of participants, and the issue and enforcement of regulations. A wide range of regulations, with significant input from multilateral bodies such as the International Finance Corporation, have been promulgated, including those dealing with such issues as insider trading, take-over trigger points and margin lending. In order to be listed, a company must have been profitable for at least 2 years, have a minimum capitalization of VND5b (approximately US$318,000), and have at least 50 shareholders who are not employees of the company, holding at least 20% of stake. Foreign invested joint venture companies are technically qualified to list, but in order to do so, they must be reorganized into joint stock company status. Companies intending to list must also submit to audit by an approved, independent auditing company.

In the beginning, an overall foreign ownership limit of 20% for equities and 40% for bonds were implemented. In July 2003, in a bid to improve liquidity, the government raised the foreign ownership limit for equities to 30% and totally removed foreign ownership limit of a particular issuer’s bonds. Foreign participants on the Stock Trading Center of Vietnam must register through a custodian licensed to hold securities on behalf of foreigners. Once registered, a securities transaction code is issued to the foreign investor that will permit securities trading.

The mechanism of trading on the Stock Trading Center of Vietnam is via an automated order-matching system. The capacity of the system is 300,000 orders per day. Currently, trading limits of 5% (for bonds and equities) either side of the previous close apply. No price restrictions have been set for newly listed securities but price caps were applied in the case of the very first day of the market’s operations.

Settlement is centralized through the Stock Trading Center of Vietnam using the Bank of Investment and Development of Vietnam (BIDV), a state-owned commercial bank. Several other domestic banks and securities companies have been authorized to accept custody of securities, with HSBC’s and Deutsche bank’s Ho Chi Minh City branches currently the only banks providing custody services for foreign investors. Custody is based on a central depository, central registry book entry system.

Presently, there are thirteen licensed securities companies. Of these, nine have been licensed to conduct a full range of securities services including underwriting, brokerage, custody, research, portfolio management and trading. The minimum capital required to operate effectively as an investment bank is VND43b (c. US$2.7m).

The current market capitalization is now US$239m for equities and US$866m for government bonds.

Official Website

http://www.vse.org.vn

See also

• Hanoi Securities Trading Center
  

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Vietnam Basics

Time: GMT +7.
Electricity: 220 volts, 50Hz. Plugs are either the two flat-pin or the two round-pin type. Three rectangular blade plugs can be found in some of the newer hotels.
Language: The official language is Vietnamese. Some Chinese, English and French are spoken. Tour guides can also speak Russian and Japanese. Numerous ethnic languages are also spoken in parts.
Health: An outbreak of bird flu in 2004 claimed numerous human lives; recent outbreaks have also resulted in human fatalities. Avian flu in poultry has now spread to numerous provinces and cities across Vietnam. All care should be taken to avoid contact with live poultry and visitors are advised to exercise caution when eating poultry dishes, particularly raw or undercooked poultry products. Other health risks in the country include Hepatitis A and E, typhoid, Japanese encephalitis, dengue fever, bilharzia, diarrhoea, meningitis, rubella and HIV/AIDS. Malaria prophylaxis is recommended for travel outside the main cities and towns, the Red River delta and north of Nha Trang. There has been an increase in the amount of deaths relating to dengue fever in recent months, and visitors should take care to protect themselves from mosquito bites during the day, especially just after dawn and just before dusk, particularly in the southern Mekong Delta region. Travellers should seek medical advice about vaccinations at least three weeks before leaving for Vietnam and ensure they have adequate insect protection. Typhoid can be a problem in the Mekong Delta. Those arriving from an infected area require a yellow fever vaccination certificate. Water is potable, but visitors usually prefer to drink bottled water. Decent health care is available in Hanoi and Ho Chi Minh City (Saigon) with English-speaking doctors, and there is a surgical clinic in Da Nang, but more complicated treatment may require medical evacuation. Pharmacies throughout the country are adequate, but check expiry dates of medicines carefully. Health insurance is essential.
Tipping: Most restaurants and hotels now add a 5 to 10% service charge to their bills, but a further 5% for good service is greatly appreciated in more upmarket places. In top hotels porters expect a small tip. Hired drivers and guides are usually tipped, and it is customary to round up the bill for taxi drivers in the cities. Tipping is not generally expected, but some small change for most services is appreciated.
Safety: Travel in Vietnam is generally safe and violent crime is uncommon. Pick-pocketing is rife, and in Ho Chi Minh City (Saigon) drive-by purse snatching is a common trick. When transferring from airports only use pre-arranged hotel pickups or licensed taxis to avoid theft from opportunists. It is best to leave valuables in a secure hotel safe and avoid obvious displays of wealth. During the monsoon season (usually between June and October) the country is prone to serious flooding and typhoons (until December), particularly the Mekong Delta and Central Region, and has resulted in isolation of areas and damage to infrastructure.
Customs: Shorts should be avoided away from the beaches if possible. Shoes must be removed on entering religious sites and a donation is expected when visiting a temple or pagoda. Photography is restricted at ports, harbours and airports, and it is polite to ask permission before taking photographs of people, especially of ethnic minorities. Never leave chopsticks sticking upright in a bowl of rice as it has strong death connotations.
Business: Business practices in Vietnam are conducted in a similar fashion to those of China, Japan and Korea rather than their Southeast Asian counterparts. Pride and tact are important to bear in mind, as practices tend to be formalised more so than in Western countries. Often it is best to be introduced rather than approach the person with whom business is intended for fear of suspicion. Negotiations and settlements may take longer as the Vietnamese like to examine contracts thoroughly. Formal dress is common but in summer months the dress tends to be more casual. It is important to be on time for business appointments as the Vietnamese consider lateness rude. The person is always addressed as Mr., Mrs., and Ms., followed by their personal name (not family name), unless otherwise referred. It is worth finding out in advance. Shaking hands with both hands is the most respectful greeting although bowing is still popular among the older population, and meetings always begin with the exchange of business cards, which should be given and received with both hands; each person expects to receive one, so be sure to bring a vast supply. Business hours are typically 8am to 5pm Monday to Friday with an hour taken at lunch, and 8am to 11.30am on Saturdays.
Communications: The international country code is +84. The outgoing code is 00, followed by the relevant country code (e.g. 001 for the United States or Canada). City/area codes are in use, e.g. Hanoi is (0)4 and Ho Chi Minh City is (0)8. GSM 900 mobile networks cover the major urban areas. Internet cafes are available in Hanoi, Ho Chi Minh City and Internet access is often available at post offices in rural areas.
Duty Free: Travellers to Vietnam over 18 years do not have to pay duty on the following items: 400 cigarettes, 100 cigars or 500g tobacco; 1.5 litres alcohol with alcohol content higher than 22% and 2 litres below 22%; up to 5kg tea and 3kg coffee; perfume and items for personal consumption within reasonable amounts; other goods to the value of 5 million Vietnamese dong.

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