Vietnam stock market operation

Topics: Stock market, Stock exchange, Stock Pages: 14 (4602 words) Published: May 11, 2014
HANOI UNIVERSITY
FACULTY OF MANAGEMENT AND TOURISM

Financial Management Report
VIETNAMESE STOCK MARKET OPERATION
Tutor: Lê Bình

Tutorial 2 FB10
Group’s members:
Hoàng Thu Nga
Nguyễn Thu Trang
Trần Thị Thảo Nguyên
Bùi Minh Quân
Nguyễn Đặng Thanh Bình
Mai Thị Hương

Ha Noi, April 11th, 2012
TABLE OF CONTENT

I. Introduction1
II. Trading venues1
1. Ho Chi Minh Stock Exchange1
2. Ha Noi Stock Exchange2
3. UPCOM & OTC3
III. Orders4
1. Market and limit orders4
2. ATC & ATO6
IV. Trading process7
V. Methods10
1. Order matching method10
2. Negotiating method 12
VI. Conclusion14
REFERENCES 15

I. Introduction
Vietnam’s securities markets are supervised and essentially managed by the State Securities Commission which is part of the Ministry of Finance. A Law on Securities (23/08/2006) was adopted in June of 2006 to facilitate the development of the securities market speedily and sustainably. Ten years after Vietnam's stock exchange began, it's become a symbol of what the country is trying to achieve but has yet to fully realize: a market-based economy. In this communist nation, the stock market is seen as the ultimate symbol of capitalism, because people have the freedom to choose their own financial fates, for good or bad, through their investments. The stock market has grown significantly — only two stocks were traded in the beginning, compared with 586 today on both the Ho Chi Minh Exchange and the Hanoi Exchange — and is attracting a growing number of domestic investors. It's also become a crucial channel for companies that want to raise medium- and long-term capital. As stock market plays an important role in mobilizing capital for companies, we would like to provide some basic information about the operation of Vietnamese stock market. II. Trading venues

The stock market, in terms of the modern economy, is considered as a place that trading medium-term and long-term securities activities are executed. The transactions are conducted in the primary market as buyers buy securities from the issuer for the first time being listed in the market, and in the secondary market when there the buyers and sellers buy an sell of securities for profit. Thus, in terms of form, the stock market is the place where the exchange operation, sale or transferring of securities take place through which the subjects own the securities change. 1. Ho Chi Minh Stock Exchange

a. History and development:
On November 28th, 1996, the Securities Trading Centre was born and four years after, the Ho Chi Minh City Securities Trading Center (HOSTC) located in Ho Chi Minh City, was officially inaugurated on July 20th, 2000, and trading commenced on July 28th, 2000. At the beginning, an overall foreign ownership limit of 20% for equities and 40% for bonds was implemented. However, in order to improve liquidity, in July, 2003, the government raised the foreign ownership limit for equities to 30% and totally removed the foreign ownership limit of a particular issuer’s bonds. On August 8th, 2007, HOSTC was renamed and upgraded to the Ho Chi Minh Stock Exchange (HOSE) which is the largest stock exchange of Vietnam at the moment and only lists as well as trades the securities of big companies. And on March 15th, 2012, HOSE decided to expand time of afternoon trading session to 1.15 hour. According to a report in January, 2012, the capitalization of HOSE increased by 84.632 billion VND, from 447.511 billion VND to reached the peak of 532.243 billion VND. b. Trading time:

The investors can make orders from Monday to Friday every week, except the holidays or special days that are regulated in the Labor Law. The stock exchange floor is open at 9.00 and close at 11.30 in the morning, open at 13.00 and close at 14.00 in the afternoon, this is the time for the transactions that follow the order matching method. The first 15 minutes of the morning...
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