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UpCom approaching
The debut of the UpCom market (unlisted public companies) has been scheduled for late June 2009. Everything is ready for the special event -- except the commodities for the market.
UpCom ComingUp
Nguyen Son, Head of the Market Development Division under the State Securities Commission (SSC), said that the list of public companies joining UpCom market would not be completed until the second week of June.
The main commodities for UpCom are expected to be shares of commercial banks. However, banks still have to get permission from the State Bank of Vietnam to be eligible to join UpCom, which will take some more time. Deputy Minister of Finance Tran Xuan Ha has recently sent a dispatch to the State Bank of Vietnam, asking for support so that commercial banks can join UpCom soon.
The first thing the companies joining UpCOm have to do is to deposit shares. Depositing shares must be completed prior to June 18, 2009, according to a regulation.
However, it is becoming clear that many public companies will not be able to deposit shares before the deadline, since there are several thousand public companies, and they have only three weeks left to complete this work.
However, this is not the biggest concern: The biggest concern now for UpCom is that only a modest number of companies will want to list on the market.
According to Kim Long Securities Company, in general, companies would rather list on official bourses than on UpCom. Companies say they cannot see any advantages with UpCom in comparison with the Hanoi and HCM City bourses. The T+3 payment method will be applied with UpCom (money and stocks will be transferred to investors’ accounts three days after the day their orders are matched).
It is also thought that UpCom will not attract investors because the ceiling daily trading band has been set up at +/-10 percent instead of +/-10 percent as previously planned, while investors are not allowed to purchase and sell the same share items on the same day.
UpCom unattractive in long term?
Commercial banks have frankly said that UpCom is not one of their strategic goals in increasing transparency in corporate governance or improving the liquidity of their shares. In fact, shares of commercial banks are still trading well and have high liquidity. Eximbank and Military Bank shares are now among the hottest blue chips on the OTC market.
Eximbank and Military Bank say they are ready to deposit shares, but will still not join UpCom in the immediate time. Tran Mien Tuan, General Director of Rong Viet Securities Company, said that Rong Viet will still serve as the general agent for Eximbank share transactions.
Meanwhile, securities companies are wiling to join UpCom. There are now over 100 operational securities companies, while 4-5 applications for setting up securities companies are awaiting licences.
The price increases of securities company shares in the last time prove to be the main reason prompting the companies to join the market. They hope that their share prices will increase further when they are on UpCom.
VietNamNet, TBKTSG
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