Gearing up for UpCom

On UpCom market, investors will have the right to negotiate with securities companies where they have accounts for transactions about security rates.

The key difference between the regulation on the organisation and transaction management over shares of unlisted public companies at the Hanoi Securities Trading Centre (UpCom market) and the regulation on the transaction of listed shares is that on UpCom, investors can negotiate with securities companies about security rates.

Decision 108 dated November 20, 2008 guiding the management of transactions on UpCom market does not clearly stipulate the minimum rate investors will have to pay. And this, according to experts, may lead to fierce competition among banks and securities companies to apply the lowest possible security rates to lure more clients.

Using Military Bank shares as an example, some securities companies set the security rate of 20%, which means that investors need to have 20 million in their accounts to be able to purchase a volume of shares worth 100 million dong.

With Decision 108, one would understand that securities companies and investors have the right to negotiate security rates and different security rates for different share items.

Some experts say that the negotiable security rates could make UpCom market more attractive. However, a question has been raised about whether it is unfair as the flexible mechanism is only applied to unlisted share items, while not to listed stocks.

Currently, in order to attract clients, some securities companies allow VIP clients to place orders even when they do not have the necessary cash. Investors pay a security of 70 percent of the value of the shares they plan to purchase and make payment on T+2 or T+3 days. For example, with just 700 million, investors can place orders to purchase 1 billion dong worth of securities, and make payment in two or three days.

A lot of securities companies have been gearing up in preparation to join UpCom, and the playing field there promises attractive profit.

VietNamNet, DTCK

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