New parent company to manage Vietnam’s major bourses

By Minh Son   December 28, 2020 | 04:00 pm PT
New parent company to manage Vietnam’s major bourses
A street vendor walks past the stock exchange in Hanoi. Photo by Reuters.
A new state-owned company will be set up to manage the Ho Chi Minh City Stock Exchange (HoSE) and Hanoi Stock Exchange (HNX).

Prime Minister Nguyen Xuan Phuc signed a decision Monday to establish the Vietnam Stock Exchange, which will be a parent company holding 100 percent stake in both the HoSE and HNX with the aim of reorganizing both bourses.

The Vietnam Stock Exchange will be a one-member limited liability company wholly owned by the State, headquartered in Hanoi, with a chartered capital of VND3 trillion ($129.3 million).

The company will have VNX (Vietnam Exchange) as its international Market Identifier Code.

VNX will have its own legal status and seal as well as financial, accounting and auditing regimes. It will be responsible for organizing the securities trading market. Its main tasks will be to develop and enact regulations on listing, securities trading and disclosure requirements.

It will supervise the activities of both HNX and HoSE, and will have the task of designing and upgrading their information technology systems, as well as monitoring and penalizing violations on both exchanges.

Once the VNX is established, the HNX will be responsible for organizing and operating markets for derivatives, bonds and other securities, while the HoSE will be responsible for stocks and other securities.

The decision to establish the Vietnam Stock Exchange will take effect on February 20, 2021.

Vietnam had publicized the plan to set up the VNX early last year, which the Nikkei Asian Review said the country has given up an earlier plan to merge the two exchanges owing to disagreement over where the combined one would be located.

HoSE accounts for over 93 percent of the two main exchanges' total market capitalization of about $162 billion as of November 2020. It is the main stock market where blue chips like Vietnam’s biggest private conglomerate Vingroup, dairy giant Vinamilk and budget carrier Vietjet Air are listed.

HNX, on the other hand, is home to smaller and mid-sized enterprises, bonds and derivatives.

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