New Vietnam Stock Exchange set up as umbrella for Hanoi and HCMC bourses
The Vietnam government has set up a new state-owned stock exchange company, Vietnam Stock Exchange (VSE), which will operate as an umbrella company for the two existing exchanges in the country.
The VSE will be headquartered in Hanoi and operate as a limited liability company wholly owned by the ministry of finance. The Hanoi Stock Exchange and the Ho Chi Minh Stock Exchange will become its subsidiaries with 100 per cent of capital invested by the VSE, but they will operate independently from the parent company. The VSE’s charter capital, 3 trillion dong ($128.64 million), will come from the charter capital of these two bourses.
The Hanoi and Ho Chi Minh City Stock Exchanges will continue to maintain their full operations. It is scheduled that the Vietnam Stock Exchange will be equitised after 2023. The main role of the YSE will be issuing regulations on stock listings and trading, monitoring the stock market and supervising its two subsidiaries.
It is understood that the Vietnam government backed down on an initially planned merger of the stock exchanges in Hanoi and Ho Chi Minh City owing to differences where a new unified bourse would be located. While the Ho Chi Minh City stock exchange accounted for around 93 per cent of the two main exchanges’ total market capitalisation of about $131 billion as of December 2018, the Hanoi Stock Exchange plays an important role for the listing of small and medium companies, as well as in the bond and derivative markets.
The government’s plan to merge the two exchanges as a cost-cutting move and the provision of a one-stop-shop securities market was discussed as early as in 2011 but announced only in 2016. Teams at the two exchanges reportedly worked on the plan for years and the Ho Chi Minh City bourse invested heavily in the trading systems and technology infrastructure.
However, there was no agreement about whether the new bourse should be operating from Vietnam’s financial center, which is Ho Chi Minh City, or from the capital and political center Hanoi which sought to gain more control of financial activities.
The new solution to set up a third body has been widely criticised by analysts and market players as it likely will increase costs for listed companies while providing no guarantee of greater market transparency and would confuse investors even more who already have to deal with two stock exchanges in the small country”s equities market.
The Vietnam government has set up a new state-owned stock exchange company, Vietnam Stock Exchange (VSE), which will operate as an umbrella company for the two existing exchanges in the country. The VSE will be headquartered in Hanoi and operate as a limited liability company wholly owned by the ministry of finance. The Hanoi Stock Exchange and the Ho Chi Minh Stock Exchange will become its subsidiaries with 100 per cent of capital invested by the VSE, but they will operate independently from the parent company. The VSE’s charter capital, 3 trillion dong ($128.64 million), will come from the charter capital...
The Vietnam government has set up a new state-owned stock exchange company, Vietnam Stock Exchange (VSE), which will operate as an umbrella company for the two existing exchanges in the country.
The VSE will be headquartered in Hanoi and operate as a limited liability company wholly owned by the ministry of finance. The Hanoi Stock Exchange and the Ho Chi Minh Stock Exchange will become its subsidiaries with 100 per cent of capital invested by the VSE, but they will operate independently from the parent company. The VSE’s charter capital, 3 trillion dong ($128.64 million), will come from the charter capital of these two bourses.
The Hanoi and Ho Chi Minh City Stock Exchanges will continue to maintain their full operations. It is scheduled that the Vietnam Stock Exchange will be equitised after 2023. The main role of the YSE will be issuing regulations on stock listings and trading, monitoring the stock market and supervising its two subsidiaries.
It is understood that the Vietnam government backed down on an initially planned merger of the stock exchanges in Hanoi and Ho Chi Minh City owing to differences where a new unified bourse would be located. While the Ho Chi Minh City stock exchange accounted for around 93 per cent of the two main exchanges’ total market capitalisation of about $131 billion as of December 2018, the Hanoi Stock Exchange plays an important role for the listing of small and medium companies, as well as in the bond and derivative markets.
The government’s plan to merge the two exchanges as a cost-cutting move and the provision of a one-stop-shop securities market was discussed as early as in 2011 but announced only in 2016. Teams at the two exchanges reportedly worked on the plan for years and the Ho Chi Minh City bourse invested heavily in the trading systems and technology infrastructure.
However, there was no agreement about whether the new bourse should be operating from Vietnam’s financial center, which is Ho Chi Minh City, or from the capital and political center Hanoi which sought to gain more control of financial activities.
The new solution to set up a third body has been widely criticised by analysts and market players as it likely will increase costs for listed companies while providing no guarantee of greater market transparency and would confuse investors even more who already have to deal with two stock exchanges in the small country”s equities market.
