HCM City stock exchange ups ante

HCM CITY — Onlycompanies with at least VND80 billion (US$5 million) in authorised capital will
be allowed to list in HCM City.

State Securities Commission Chairman Vu Bang told reporters on the sidelines of a Listed Company Club and investors’ meeting last Saturday in HCM City that a draft decree to guide the Securities Law had been submitted to the Government.

Under the decree, expected to be approved early next year, companies already listed but with less than
VND80 billion equity would have two years to increase their capital failing which they would be moved to the Ha Noi exchange.

Bang said the HCM City bourse would target major institutions in industries like banking, insurance,
and telecom.

FPT lists this week

The Vietnamese markets moved erratically during the past week but with more ups than downs, propelled
by the impending listing of several blue chips.

The VN Index closed almost 65 points higher at 696.12 even though two out of the three trading sessions
last Friday were cancelled due to technical problems at the HCM City Securities Trading Centre.

The Corporation for Financing and Promoting Technology (FPT) will list in HCM City on Wednesday.

FPT is a market leader in systems integration, mobile phone distribution, software production, and telecom
and internet services. It recently opened a software engineering university.

Big names like Intel Capital and Texas Pacific Group have invested US$36.5 million in FPT, whose
equity capital now stands at over VND608 billion ($38 million). Its shares were traded unofficially at 20 times their face value.

It will be followed the next day by Thu Duc Housing Development Corporation (TDH). With capital of
VND170 billion ($10.6 million) it will be the first property company to list. It is owned by various institutional and individual investors including major companies like the HCM City Securities Company, Saigon Securities Inc, Amersham Industries Ltd, and Vietnam Dragon Fund Ltd.

The Hong Kong and Shanghai Banking Corp rates TDH as one of Viet Nam’s top 15 blue chip companies.

The 16-year-old joint-stock company has invested in more than 30 housing projects including An Phu and Binh An, and has eight others under construction, including Cantavil and Hiep Phu.

It is also a major financial investor with VND250 billion ($15.6 million) in Phuoc Long Textile Joint Stock Co., HCM City Housing Development Bank, and Prudential Balanced Investment Fund 1. Its chairman, Le Chi Hieu, said the company would begin to offer new services like property management and brokerage.

It made a profit of VND38 billion ($2.7 million) last year and VND40 billion in the first three quarters
this year.

Securities firm to debut

Saigon Securities (SSI), among Viet Nam’s first securities companies, will this Friday become the first
company from the industry to list on the Ha Noi Securities Trading Centre.

SSI has an equity of VND500 billion ($31.25 million) and total assets of over VND2.5 trillion ($156.25 million).

It services over two-thirds of all foreign stock market investors and consulted for 17 major companies listed in HCM City.

It expects net profits this year of VND148 billion ($9.25 million) and VND302 billion next year, and to
pay annual dividends of 30 per cent until 2009. — VNS

see details: VietNam News

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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Vietnamese Stocks - Equities in Vietnam

Vietnam Stock Exchange - The Stock Exchange for Vietnamese Stock Market

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’). It is the smallest stock exchange in Southeast Asia. The Vietnam stock exchange is both operated and regulated by the State Securities Commission.

More information about Vietnam Stock Exchange

Vietnamese Securities Companies

As of February 2004, thirteen companies have been licensed by both the State Securities Commission and Ho Chi Minh City Stock Trading Center. Of these, nine have capital of VND43bn (US$2.73m) or more and have been licensed to conduct a full range of securities business including brokerage, advisory, fund management, proprietary trading and underwriting. Saigon Securities Incorporation, Hai Phong Securities Joint Stock Company and EAB Securities Company have chartered capital ranging from VND20-22bn (US$1.27m-US$1.4m) while Mekong Securities Joint Stock Company are capitalized at VND6bn (US$0.38m). Neither company is licensed to conduct proprietary trading or underwriting.

More information about Vietnamese Stock Brokers

Foreign Participation

Foreign ownership of shares in companies listed on the Ho Chi Minh City Stock Trading Center is limited to 49% of the company’s issued share capital. For bonds, foreign investors can hold 100% ownership of a particular issuer’s bonds.

Foreign investors who wish to purchase shares through the Ho Chi Minh City Stock Trading Center are required to register through a custodian licensed to hold securities on behalf of foreigners – of which there are currently three; The Hongkong and Shanghai Banking Corporation, Deutsche Bank AG and Standard Chartered Bank. Beside these three, securities companies can play role of custodian unit to hold stocks for foreigners as well. Once registered, a Securities Transaction Code is issued to the foreign investor who may then open a Trading Account with one or more of the twelve licensed Securities Companies.

How to Buy Vietnam Stocks

For private investors, it is necessary to fly to Ho Chi Minh City (Saigon) to open a securities account and a bank account. Foreigners are able to transfer funds out of Vietnam after fulfill tax obligations. There is no time constrain.

You may wish to contact Vietnamese stock brokerage firms on this list for more information.

Thanks for Minh Quan for the updates of the rules of Vietnam stock exchange.

see details Vietnamese Stocks - Equities in Vietnam