~ Le Viêt Nam, aujourd'hui. ~
The Vietnam News

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Vietnam stock market closed

BANGKOK - Regulatory authorities for Communist Vietnam's newly launched securities market cut off trading on Monday after the prices of the two listed stocks were pushed up 2 per cent by eager investors.

The State Securities Commission had announced stock prices on the Ho Chi Minh City exchange would be allowed to rise or fall 5 per cent in a single day. But shortly before the market opened on Monday - the second day of trading - the regulators said they would cut off sales after prices had risen 2 per cent. "They're worried that the market is going to shoot up too quickly," said Jonathon Waugh, deputy general director at ACB Securities, one of six securities companies licensed to trade on the exchange. "There are a lot of hungry people out there. They could push the price up to quite seriously high levels."

It was the second time securities regulators had changed the rules just before the market's opening bell. When the exchange started trading last Friday, the regulators decided at the last minute to set price ceilings on the two listed stocks rather than allow the prices to float as initially planned. Yet so far, brokers have supported the efforts the government's intervention, which they said would protect inexperienced small investors. "I believe the government is right to give a ceiling price," said Pham Uyen Nguyen, deputy managing director of Bao Viet Securities.

"Small investors don't know anything; they just follow speculation." As they had on Friday, potential Vietnamese investors flocked to securities companies on Monday hoping to acquire shares in REE, a refrigeration and air-conditioning company, or Sacom, a telecommunications cable manufacturer. But the caps on prices - and the expectation of further price rises - kept sellers away, leaving many would-be buyers disappointed. "Part of the price problem," said Mr Pham, "is that so many Vietnamese are eager to buy equities but there just aren't enough stocks yet on the market." Besides REE and Sacom, two other companies - a paper maker and a forwarding company - have permission to list but must still complete formalities so trading can begin in their shares. "We need to try to provide more commodities to the market - then the balance of demand and supply will be changed," said Mr Pham. Trading on the exchange, which is limited to six hours a week, will resume on Wednesday.

By Amy Kazmin - The Financial Times - July 31st, 2000.