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Banking & Finance

Transparency of UPCoM market strengthened

Released at: 10:31, 01/09/2016

Transparency of UPCoM market strengthened

Photo: Duc Anh

HNX and SSC to improve management over market after failings become evident.

by Hung Nguyen

The State Securities Commission (SSC) will introduce a series of stricter measures for the UPCoM market in an attempt to improve its management and supervisory functions.

The Hanoi Stock Exchange (HNX) will improve appraisal quality and transaction registration management while continuing classification works in terms of business sector.

HNX authorities, in cooperation with SSC inspectors, will inspect those firms on the UPCoM market found guilty of poor information disclosure, according to Ms. Vu Thi Chan Phuong, Deputy Chairwoman of the SSC.

Ms. Phuong made the comments at the SSC’s August press briefing, where the stock market watchdog vowed to improve the performance of the country’s bourse after a number of firms were found to have poor information disclosure over the last few months.

“There are no specific requirements for shares trading on the UPCoM market,” she said. “In order to minimize the risks, however, authorities will adopt new measures to enhance information disclosure.”

Regarding the management of the UPCoM market, HNX is researching the possibility of deploying market maker methods. Securities firms would have a role as market makers to create more layers of management and supervision on company with shares on UPCoM.

HNX terminated the trading of the Middle Land Mining and Mineral Export Joint Stock Company (code MTM) on June 20 after just two months of trading on UPCoM. For the first few days the company’s shares hit the ceiling and then fell significantly, causing losses for many investors. A number of investors found that the physical addresses of the company was false and that its charter capital was too low, at VND310 billion ($13.9 million), to be on the market.

HNX and the SSC, however, refused to take responsibility for the approval of the share for trading on UpCoM.

In May, HNX conducted a review of eight companies on the UPCoM market regarding reporting and information disclosure. Three companies did not submit 2015 financial reports and five refused to submit auditor comments on their financial reports.

As at the end of the second quarter of this year, after six years of operating, the UPCoM market had a total of 308 companies trading. From July 1, 2015 to June 30, 2016, the market saw over 1.7 million shares traded with a value of VND25.9 trillion ($1.16 billion), an increase of 192 per cent over the previous period. Average volume trading per session over the year reached 7 million shares with a value of VND102.7 billion ($4.6 million), an increase of 146 per cent and 186.8 per cent, respectively, against the previous period.

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