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New negotiating system installed to boost volumes in companies market
The Unlisted Public Companies Market (UPCoM) will apply continuous order matching as of July 19 in an effort to boost the market's trading volumes.
UPCoM was launched in June 2009 under the auspices of the Ha Noi Stock Exchange. Since then, the market has utilised only one trading method, electronic negotiation, which allows investors to find sellers or buyers through a technical system and then negotiate to trade shares.
In practice, the system proved slow and unresponsive to market fluctuations, resulting in investor disinterest in UPCoM. The UPCoM-Index as of yesterday had fallen to half of its starting value of 100 points at its launch a year ago. After rising 4.86 per cent on the day yesterday, the index closed at 52.2 points.
Trading value on the day, however, was just VND50.6 billion (US$2.6 million) on a volume of only 2.7 million shares.
APEC Securities Company General Director Nguyen Do Lang agreed that the current negotiating system was among the reasons for UPCoM's disappointing performance.
Public companies had in turn become hesitant to list on the market because of its poor track record as a venue for raising capital and due to their concerns with falling share values, Lang said.
In an initial effort to cope with the concerns, market regulators have set conditions that only public companies with shares traded on the over-the-counter market and deposited with the Securities Depository Centre could list on UPCoM.
New regulations also provide that a company seeking to list on UPCoM needs a supporting commitment from a stock brokerage with a seat on the stock exchange.
To further boost trading, effective July 19, UPCoM trading hours will be extended, beginning at 8.30am instead of the current 10.00am. Afternoon trading between 13.30 and 15.00 will also be added.
vietnamnews
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