UPCoM set to close its doors in five years

January 09, 2011 | 16:45

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Vietnam’s Unlisted Public Companies Market, a buffer between the local unofficial and official bourses, is set to close within five years.

The change will result in greater transparency for investors and the markets

Companies floating on the market (UPCoM) would be gradually shifted into the official Ho Chi Minh Stock Exchange (HoSE) and Hanoi Stock Exchange (HNX), said Tran Van Dung, general director of HNX, the governing body of UPCoM.

“The target to close UPCoM, in fact, is the target of sticking companies’ initial public offerings with official listing like developed nations do,” said Dung.

UPCoM was born in June 2009 to facilitate trading of shares of public firms before they can list on HoSE and HNX. But UPCoM’s lower information disclosure requirements make firms reluctant to find their way into HoSE and HNX.

The UPCoM is currently home to only 106 among more than 4,000 public companies in Vietnam.

Its market liquidity, meanwhile, was at a low level with trading values averaging at VND7.5 billion ($375,000) per session, less than one tenth of HoSE and HNX’s transaction values.

The new amended Law on Securities adds a new regulation that all public companies must trade their shares on regulated markets within one year after making an initial public offering.

The amended law, coming into effect in July 1, 2011, is said to strongly animate UPCoM as a huge number of public companies are forced to float on the government-run markets.

By Hai Linh

vir.com.vn

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