The Hochiminh Stock Exchange

Published Date: 02 Nov 2017

On May 11th, 2007, the Prime Minister signed Decision No.559/2007/QD-TTg to convert HCMC Securities Trading Center (HoSTC) to Hochiminh Stock Exchange (HOSE). HOSE, a State owned legal entity, has a private seal and a private account and runs as a limited company with functions and duties as follows:

I. The Hochiminh Stock Exchange shall have major rights as follows:

1.Promulgate regulations on listing, trading, information disclosure and trading members after approved by the State Securities Commission;

2.Organize, regulate and operate securities trading activities;

3.Interrupt, suspend or cancel securities trading activities under the Securities Trading Regulation;

4.Approve or cancel listing; inspect and supervise the maintenance of the listing conditions of the listed firms;

5.Approve or cancel trading membership; inspect and supervise securities trading activities of members on the exchange;

6.Inspect and supervise the information disclosure of the listed firms and trading members on the exchange;

7.Supply market information and others related to listing stocks;

8.Adjust the conflicts related to securities trading activities at the members’ requests;

9.Collect fees under provisions of the Ministry of Finance.

II. The Hochiminh Stock Exchange shall have major duties as follows:

1.Guarantee that securities trading activities are made public, fairly, lawfully and effectively;

2.Comply with statistical standards, financial obligations, accounting and auditing principles by the laws;

3.Disclose information on securities trading activities, the listed firms on the exchange, brokerages, fund management companies, securities investment funds or companies, and supervisory information;

4.Supply information and co-ordinate the State’s organizations, which have authority to investigate and prevent violations of the Securities Law;

5.Co-ordinate to popularize knowledge of securities and securities market;

6.Compensate the trading members for losses (if any) caused by the exchange, except force majeure

HOCHIMINH STOCK EXCHANGE

ESTABLISHMENT & DEVELOPMENT

In an effort to industrialize and modernize the country, maintain stable economic growth and restructure the economy to enhance its efficiency and competition, Vietnam had needed huge capital of investment. Therefore, building securities market in Vietnam had become urgent demand to mobilize mid-term and long-term capital within as well as outside the country into economic investment through debt securities and capital securities. In addition, equitization of state-owned enterprises along with establishment and development of securities market would create opener and healthier business environment. On July 10th 1998, the Prime Minister signed Decree No. 48/1998/ND-CP on stock and securities market and a Decision to set up two (02) securities trading centers at Hanoi and Ho Chi Minh City.

On July 20th 2000, the Ho Chi Minh City Securities Trading Center was officially put into operation and executed the first trading session on July 28th 2000 with 2 types of listing stocks.

After 7 years of growing and integrating into the global securities market, the government signed Decision No. 599/QD-TTg on May 11th 2007 to transfer the Ho Chi Minh City Securities Trading Center to Hochiminh Stock Exchange (HOSE). On August 8th 2007, Hochiminh Stock Exchange was officially opened.

Until now, Hochiminh Stock Exchange has gained encouraging achievement. Till December 31st 2007, there had been 507 types of listing securities consisting of the followings: 138 stocks with total capitalization value of VND365,000 billion, including the contribution of 6 foreign – owned companies; 03 fund certificates with volume of 171.4 million units and 366 bond types. In the near future, the number of listing stocks on HOSE will increase quickly because the government has policy to equitize some big companies and state-owned commercial banks to list on the market.

Thanks to the growth of the stock market, the number of member securities companies of HOSE has been increasing in volume, size and service quality. Till the end of December 31st 2007, there had been 62 securities companies registering to be members of HOSE with total registered capital of VND9,960 billion. Most of member securities companies have been granted licenses covering all kinds of businesses: brokerage, dealing on own accounts, underwriting and investment advisory.

A quick increase in the number of listing stocks in the market has attracted many local and foreign investors, individuals as well as institutions. At the end of 2006, the number of investor accounts opened in member securities companies was 106,000. At the end of 2007, this number grew to 298,000 in which foreign investors made up over 7,000 accounts.

To satisfy the requirements for the market’s growth, the Hochiminh Stock Exchange has applied continuous order matching method since July 30th, 2007 and accepted remote terminals few months later. As of December 31st, 2007, we held 1,699 trading sessions with the total volume of 4,225 million shares and total value of VND384,452 billion. In 2007, the total trading volume was 2,390 shares and the total trading value was VND245,651 billion.

As from the end of September 2007, the trading value of the whole market has reached over VND1,000 billion per session. The price fluctuation can be seen clearly via VN INDEX’s changes: from 307.5 points in late 2005 to the record 1,170.67 points on March 12th, 2007.

Regarding to foreign activities, we have signed many MoU with other exchanges in London, New York, Malaysia, Singapore, Czech, Warsaw (Poland), Tokyo (Japan), etc., on IT, training, information and cross listing (in the future).

The Vietnam’s stock market will grow higher and firmer thanks to the following reasons: Vietnam’s strong economic growth in the process of economic integration, more and more foreign investment, the policies of privatizing state-own enterprises and listing afterwards, etc. However, to keep the achievements, the Hochiminh Stock Exchange will have to do its best to perform the following duties:

•Create good conditions for joint-stock firms to list their stocks on the exchange;

•Develop the information systems in order to publicize information fully, timely and accurately;

•Improve software to follow and detect insider and corner trading;

•Upgrade the information technology system due to the market’s requirements and international standards; continue applying and completing the "remote terminals" project and turn to non-floor trading method in the future.

•Propose sensible policies for a strong securities market;

•Continue signing more MoU with other stock exchanges and together hold the cross listing on the exchange floors.