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UpCom lacking banks, why?
While building up the plan to develop the market of unlisted public companies (UpCom), the State Securities Commission (SSC) hoped that shares of banks and financial institutions would be the main commodities on the market. However, to date, no commercial bank has brought shares to the market for transactions.
There are several reasons why banks are hesitating to bring their shares to UpCom, including complicated procedures. In order to be able to list shares on UpCom, banks have to get the approval of the State Bank of Vietnam, while this takes time.
Saigon Commercial Bank (SCB) was the first bank to register to have shares transacted on UpCom. However, the bank has finally given up as it could not fulfill necessary procedures after many months. SCB has decided to apply for listing on the HCM City Stock Exchange (HOSE).
Pham Anh Dung, General Director of SCB, related that the bank asked for the State Bank of Vietnam’s instructions on some issues related to foreign investors’ purchases and sales of stocks on UpCom market and to the unlisted stock transaction reporting scheme.
“The State Bank told us to wait for guiding documents, while the application by SCB for putting the bank’s shares into transactions on UpCom was transferred from one central bank department to another, but no official answer was given,” Dung said.
He went on to say that with so many complicated procedures, SCB’s board of directors decided to list its shares on HOSE, adding that the bank is nearly finished fulfilling necessary procedures to have its shares listed on that bourse.
HCM City-based HDBank once also planned to bring its shares to UpCom. However, the bank’s leadership was also concerned about the complicated procedures.
Representative from a joint-stock bank said that besides the complicated procedures, the bank also does not like the transaction method and time of transaction. “Instead of entering UpCom market, we are considering listing shares on the official bourses,” he said.
Nguyen Thi Hoang Lan, Deputy Director of Hanoi Stock Exchange (HNX), confirmed that many banks hesitate to apply to have shares transacted on UpCom as they have to get the approval from the State Bank of Vietnam.
However, Lan said that the problem will be settled soon as the State Bank is compiling a document which stipulates the procedures banks have to do to register transactions on UpCom.
Lan said that besides SCB, which decided not to list on UpCom, HNX has received an application from one other bank, Dai A Bank.
Tran Xuan Dung, Director of the HCM City branch of Dai A Bank, said that the bank has submitted necessary documents and is now awaiting approval from the State Bank to list on UpCom. He said that by entering UpCom, the bank aims to improve the liquidity of its shares, advertise its brand name and image.
Meanwhile, Head of the Market Development Division under the State Bank of Vietnam Nguyen Son has denied the fact that the time-consuming formalities are the main reason that banks are hesitant to come to UpCom.
“The matter here is whether banks really want to bring their shares to UpCom,” Son said.
He thinks that big banks which have shares with high liquidity on the market like Military Bank or Eximbank will prefer listing shares on official bourses to the new UpCom.
Son has revealed that the State Securities Commission late last week had a working session with the State Bank of Vietnam on the formalities needed to put shares into transaction on UpCom. The commission asked for the current regulations to be loosened to pave the way for banks to enter the UpCom market, suggesting they should not have to ask for permission from the State bank of Vietnam.
vietnamnet, dtck
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