Stock market in Vietnam

Dec. 27 (VNA) -- The State Securities Commission's Ho Chi Minh City representative Bui Nguyen Hoan proposes that irregularities at the city's stock-trading centre be eliminated before the opening of a Ha Noi bourse.

Hoan says Viet Nam's infant stock market offers many potential opportunities for retrieval at low risks if the irregularities can be eliminated. Foreign buyers have yet to properly engage in a market that involves just USD 20 million worth of listed stock shares.

But there are signs of foreign money being invested in the name of local investors and this is causing market disorders. The immediate task is to identify the false investors and, more importantly, write a law to deal with them. But the stock market should adjust its rules of operation if it wants to become really attractive.

Listed companies are required to publish yearly financial profiles and report immediately any occurrence likely to affect their production, profits or market price. But yearly reports are not sufficient, says Hoan. He argues that it's better to publish monthly or at least quarterly reports because the stock market holds transactions every two days.

Some companies have broken the law by issuing monthly financial reports and even reports about profit sharing among shareholders aimed at boosting prices.

Reports leaking from a recent meeting of a joint stock company's shareholders showed that almost 40 percent of the shares had "no holders".

And, in year-end-trading, the number of shares for sale had increased when elsewhere this was normally a time for shareholders to take their profits. It shows the holders did not care much for profits.

Explaining the failure of three government-bond auctions in the past five months, Hoan says the Stock Securities Centre should identify those who were likely to be real bidders at such sales.

He says that only two of five bidders for Government bonds were successful at the auctions because securities companies, financial companies and banks without much idle money had been targeted for this product. But potential bidders of real potential - individuals who might buy stocks or company shares through Securities Companies or on the Securities Transaction Centre's floor - had been ignored.

As a result, Hoan is proposing that individuals be included in any list of potential bidders for government bonds.

He says the purpose of Viet Nam's stock market is to raise investment funding and not to create profits from price differences, although this must be recognised.