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

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[Year 2001]

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.