Hanoi prepares for stock market
BANGKOK - Vietnam is conducting trials of securities trading this week in preparation
for the launch of the communist country's first stock market.
The exchange, officially known as the Securities Trading Centre, will
operate in Ho Chi Minh City, Vietnam's bustling business capital. Although no
date has been officially announced for the start of trade, Vietnam's media
have reported that it could begin on July 15.
Vietnam-watchers believe the new trading centre is an experimental first step towards
opening a broader stock exchange that would eventually allow local companies to raise new
capital once market regulators and Communist officials gain more confidence in the process.
It is also intended as a confidence booster to outside investors. However, a fully fledged
stock exchange is not expected to be set up for some years, despite repeated promises
during the past decade that a stock exchange was imminent.
"By having a stock market, you are sending out an enormously positive message to foreign
investors at a time when you desperately need to send out a positive message," said
Jonathon Waugh, Jardine Fleming's chief representative in Vietnam.
While both domestic and foreign investors will be allowed to play the Vietnamese market,
few expect a massive rush of activity when the opening bell rings. So far, just two
companies - Refrigeration and Electrical Engineering, and Cable & Telecommunications
Material, both privatised state-enterprises - have been given approval by the State Securities
Commission to list their shares.
However, several other companies are expected to get permission to list their shares before
trading starts. According to the rules by the market regulator, companies that have earned
two years of profits and have a minimum registered capital of about $700,000 are eligible to
list.
These first listings will not raise any new capital for the companies.
Instead, they will facilitate the trading of shares already allocated to various parties,
including the companies' employees and members of the public. Such shares are currently
traded in a popular coffee house that has become a kerbside market.
By Amy Kazmin - The Financial Times - June 21, 2000.
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