Ho Chi Minh City Securities Trading Center
Encyclopedia
Ho Chi Minh City Stock Exchange (HOSE), located in Ho Chi Minh City
, is the largest stock exchange
in Vietnam
. Established in 2000 as the Ho Chi Minh City Securities Trading Center (HoSTC), it is an administrative agency of the State Securities Commission, along with the Hanoi Securities Trading Center
. The stock exchange is located at 45-47 Ben Chuong Duong, District 1, Ho Chi Minh City
, Vietnam
. The current top executive of HSX, with the title of Deputy Chairman, is Mr. Tran Dac Sinh.
On 8 August 2007, HoSTC was renamed and upgraded to the Ho Chi Minh Stock Exchange (HOSE).
In the beginning, an overall foreign ownership limit of 20% for equities and 40% for bonds was implemented. In July 2003, in a bid to improve liquidity, the government raised the foreign ownership limit for equities to 30% and totally removed the foreign ownership limit of a particular issuer’s bonds. Foreign participants on the Stock Trading Center of Vietnam must register through a custodian licensed to hold securities on behalf of foreigners. Once registered, a securities transaction code is issued to the foreign investor that will permit securities trading.
As of 2006, there are thirteen licensed securities companies. Of these, nine have been licensed to conduct a full range of securities services including underwriting
, brokerage, custody, research, portfolio management
and trading
. The minimum capital required to operate effectively as an investment bank was VND43b (c. US$2.7m).
At the end of 2006, combined market capitalization
of both Ho Chi Minh City Securities Trading Center and Hanoi Securities Trading Center
is 14 billion US dollars, or 22.7% GDP of Vietnam
.
On 8 August 2007, HoSTC was renamed and upgraded to the Ho Chi Minh Stock Exchange. This is the largest stock exchange of Vietnam at the moment.
As of July 2010, there were 247 companies listed on the HOSE with a market capitalization of VND537.4 trillion ($28.28 billion). The exchange had 141 listings in January 2008, including 138 company stocks
and three fund certificates, with a total market capitalization of 365.7 trillion dong ($23 billion). Vietnam limits foreign ownership of listed companies to 49%.
is standardized at VND10,000 for equities and VND100,000 for bonds. Trading is conducted daily with two matchings in a morning session, from 9 a.m. to 11 a.m.
The State Securities Commission (SSC), a body established formally in 1996, is responsible for capital markets development, licensing of participants, and the issue and enforcement of regulations. A wide range of regulations, with significant input from multilateral bodies such as the International Finance Corporation, have been promulgated, including those dealing with such issues as insider trading
, take-over trigger points and margin lending. To be listed, a company must have been profitable for at least 2 years, have a minimum capitalization of VND5b (approximately US$318,000), and have at least 50 shareholders who are not employees of the company, holding at least 20% of stake. Foreign invested joint venture companies are technically qualified to list, but to do so, they must be reorganized into joint stock company status. Companies intending to list must also submit to audit by an approved, independent auditing company.
The mechanism of trading on the Stock Trading Center of Vietnam is via an automated order-matching system. The capacity of the system is 300,000 orders
per day. Currently, trading limits of 5% (for bonds and equities) either side of the previous close apply. No price restrictions have been set for newly listed securities but price caps were applied in the case of the very first day of the market’s operations.
Settlement
is centralized through the Stock Trading Center of Vietnam using the Bank for Investment and Development of Vietnam
(BIDV), a state-owned commercial bank. Several other domestic banks and securities companies have been authorized to accept custody of securities, with HSBC
’s and Deutsche Bank
’s Ho Chi Minh City branches currently the only banks providing custody services for foreign investors. Custody is based on a central depository, central registry book entry system.
Ho Chi Minh City
Ho Chi Minh City , formerly named Saigon is the largest city in Vietnam...
, is the largest stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
in Vietnam
Vietnam
Vietnam – sometimes spelled Viet Nam , officially the Socialist Republic of Vietnam – is the easternmost country on the Indochina Peninsula in Southeast Asia. It is bordered by China to the north, Laos to the northwest, Cambodia to the southwest, and the South China Sea –...
. Established in 2000 as the Ho Chi Minh City Securities Trading Center (HoSTC), it is an administrative agency of the State Securities Commission, along with the Hanoi Securities Trading Center
Hanoi Securities Trading Center
Hanoi Securities Trading Center located in Hanoi, Vietnam, was launched in March 2005 and handles auctions and trading of stocks and bonds...
. The stock exchange is located at 45-47 Ben Chuong Duong, District 1, Ho Chi Minh City
Ho Chi Minh City
Ho Chi Minh City , formerly named Saigon is the largest city in Vietnam...
, Vietnam
Vietnam
Vietnam – sometimes spelled Viet Nam , officially the Socialist Republic of Vietnam – is the easternmost country on the Indochina Peninsula in Southeast Asia. It is bordered by China to the north, Laos to the northwest, Cambodia to the southwest, and the South China Sea –...
. The current top executive of HSX, with the title of Deputy Chairman, is Mr. Tran Dac Sinh.
On 8 August 2007, HoSTC was renamed and upgraded to the Ho Chi Minh Stock Exchange (HOSE).
History
The Ho Chi Minh City Securities Trading Center (HoSTC) located in Ho Chi Minh City, was officially inaugurated on July 20, 2000, and trading commenced on July 28, 2000. Initially, two equity issues were listed, Refrigeration Electrical Engineering Joint Stock Corporation (REE) and Saigon Cable and Telecommunication Material Joint Stock Company (SACOM).In the beginning, an overall foreign ownership limit of 20% for equities and 40% for bonds was implemented. In July 2003, in a bid to improve liquidity, the government raised the foreign ownership limit for equities to 30% and totally removed the foreign ownership limit of a particular issuer’s bonds. Foreign participants on the Stock Trading Center of Vietnam must register through a custodian licensed to hold securities on behalf of foreigners. Once registered, a securities transaction code is issued to the foreign investor that will permit securities trading.
As of 2006, there are thirteen licensed securities companies. Of these, nine have been licensed to conduct a full range of securities services including underwriting
Underwriting
Underwriting refers to the process that a large financial service provider uses to assess the eligibility of a customer to receive their products . The name derives from the Lloyd's of London insurance market...
, brokerage, custody, research, portfolio management
Investment management
Investment management is the professional management of various securities and assets in order to meet specified investment goals for the benefit of the investors...
and trading
Stock trader
A stock trader or a stock investor is an individual or firm who buys and sells stocks in the financial markets. Many stock traders will trade bonds as well...
. The minimum capital required to operate effectively as an investment bank was VND43b (c. US$2.7m).
At the end of 2006, combined market capitalization
Market capitalization
Market capitalization is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding of a publicly traded company...
of both Ho Chi Minh City Securities Trading Center and Hanoi Securities Trading Center
Hanoi Securities Trading Center
Hanoi Securities Trading Center located in Hanoi, Vietnam, was launched in March 2005 and handles auctions and trading of stocks and bonds...
is 14 billion US dollars, or 22.7% GDP of Vietnam
Vietnam
Vietnam – sometimes spelled Viet Nam , officially the Socialist Republic of Vietnam – is the easternmost country on the Indochina Peninsula in Southeast Asia. It is bordered by China to the north, Laos to the northwest, Cambodia to the southwest, and the South China Sea –...
.
On 8 August 2007, HoSTC was renamed and upgraded to the Ho Chi Minh Stock Exchange. This is the largest stock exchange of Vietnam at the moment.
As of July 2010, there were 247 companies listed on the HOSE with a market capitalization of VND537.4 trillion ($28.28 billion). The exchange had 141 listings in January 2008, including 138 company stocks
Stocks
Stocks are devices used in the medieval and colonial American times as a form of physical punishment involving public humiliation. The stocks partially immobilized its victims and they were often exposed in a public place such as the site of a market to the scorn of those who passed by...
and three fund certificates, with a total market capitalization of 365.7 trillion dong ($23 billion). Vietnam limits foreign ownership of listed companies to 49%.
Function
The Stock Trading Center of Vietnam is also the official mechanism through which new government bonds are issued, and it functions as the secondary market for a number of existing bond issues. All securities traded on the Stock Trading Center of Vietnam are denominated in Vietnamese dong (VND). Par valuePar value
Par value, in finance and accounting, means stated value or face value. From this comes the expressions at par , over par and under par ....
is standardized at VND10,000 for equities and VND100,000 for bonds. Trading is conducted daily with two matchings in a morning session, from 9 a.m. to 11 a.m.
The State Securities Commission (SSC), a body established formally in 1996, is responsible for capital markets development, licensing of participants, and the issue and enforcement of regulations. A wide range of regulations, with significant input from multilateral bodies such as the International Finance Corporation, have been promulgated, including those dealing with such issues as insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
, take-over trigger points and margin lending. To be listed, a company must have been profitable for at least 2 years, have a minimum capitalization of VND5b (approximately US$318,000), and have at least 50 shareholders who are not employees of the company, holding at least 20% of stake. Foreign invested joint venture companies are technically qualified to list, but to do so, they must be reorganized into joint stock company status. Companies intending to list must also submit to audit by an approved, independent auditing company.
The mechanism of trading on the Stock Trading Center of Vietnam is via an automated order-matching system. The capacity of the system is 300,000 orders
Order (exchange)
An order in a market such as a stock market, bond market, commodity market or financial derivative market is an instruction from customers to brokers to buy or sell on the exchange.These instructions can be simple or complicated...
per day. Currently, trading limits of 5% (for bonds and equities) either side of the previous close apply. No price restrictions have been set for newly listed securities but price caps were applied in the case of the very first day of the market’s operations.
Settlement
Settlement
Settlement may refer to:*Consolidation , a process by which soils decrease in volume*Human settlement, a community where people live**Israeli settlement, communities inhabited by Israeli Jews in territory that came under Israel's control as a result of the 1967 Six-Day War**Urban settlement **Rural...
is centralized through the Stock Trading Center of Vietnam using the Bank for Investment and Development of Vietnam
Bank for Investment and Development of Vietnam
The Bank for Investment and Development of Vietnam is a large state-owned bank in Vietnam. It is the nation's number one bank in net income and the second biggest bank in asset...
(BIDV), a state-owned commercial bank. Several other domestic banks and securities companies have been authorized to accept custody of securities, with HSBC
HSBC
HSBC Holdings plc is a global banking and financial services company headquartered in Canary Wharf, London, United Kingdom. it is the world's second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine...
’s and Deutsche Bank
Deutsche Bank
Deutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets...
’s Ho Chi Minh City branches currently the only banks providing custody services for foreign investors. Custody is based on a central depository, central registry book entry system.
See also
- Economy of VietnamEconomy of VietnamThe economy of Vietnam is a developing planned-market economy. Since the mid-1980s, through the "Đổi Mới" reform period, Vietnam has made a shift from a highly-centralized planned economy to a socialist-oriented market economy which use both directive and indicative planning . Over that period, the...
- Hanoi Securities Trading CenterHanoi Securities Trading CenterHanoi Securities Trading Center located in Hanoi, Vietnam, was launched in March 2005 and handles auctions and trading of stocks and bonds...
- List of East Asian stock exchanges