Equity Market
As of June 2010, 622 listed companies and 4 listed investment funds were traded on the 3 Vietnamese Stock Exchanges, with a total market capitalization of VND746.76 trillion (US$39.1 billion).
During the first half of 2010, 75 companies were newly listed, and the market capitalization registered an increase of VND126.76 trillion (US$5.55 billion) in comparison with December 2009.
Ho Chi Minh City Stock Exchange (“HOSE”)
HOSE (formerly Ho Chi Minh City Securities Trading Center) commenced trading in July 2000. As of June 2010, there were 242 companies and 4 investment funds listed on the HOSE with a total market capitalization of VND594.13 trillion (US$31.1 billion). Trading on the HOSE is accomplished via an automated call order-matching system, which involves matching orders on a periodic rather than continuous basis, through three regular daily trading sessions, and a special negotiated trading session for large blocks of 20,000 shares or more. Shares trade by lots of 10 shares. Shares are only allowed to trade within a 5% band either side of the previous session’s closing price.
Hanoi Stock Exchange (“HNX”)
HNX (formerly Hanoi Securities Trading Centre) commenced trading in March 2005. As of June, 2010 there were 304 companies registered for trading on the HNX with a total equity market capitalization of VND141.37 trillion (US$7.4 billion). Trading on the HNX is accomplished via an automated continuous order-matching system with a special negotiated trading session for blocks of 5,000 shares or more. Shares trade by lots of 100 shares. Shares are only allowed to trade within a 7% band either side of the previous session’s closing price.
Unlisted Public Company Market (“UPCoM”)
UPCoM commenced trading in June 2009. As of June, 2010, there were 76 companies registered for trading on the UpCoM with a total market capitalization of VND11.27 trillion (US$0.59 billion). Before UPCoM’s operation, many unlisted companies in Vietnam traded on an informal, non-centralized network of broker-dealers, intermediaries, sellers and buyers. Therefore, UPCoM acts as an intermediary for the stock transactions of the registered unlisted public companies. Shares are only allowed to trade within a 10% band either side of the previous session’s closing price.
All securities traded on the HOSE, HNX and UPCoM are denominated in Vietnamese Dong (VND). All listed shares are deposited with the Vietnam Securities Depository.
Regulatory Body
Securities activities in Vietnam are regulated by the State Securities Commission (SSC), which was formally established in 1996. In February 2004, the government made the SSC a part of the Ministry of Finance. The SSC is responsible for the development of the securities market, licensing of market participants, and the issuance and enforcement of regulations in relation to securities market activities in Vietnam.
Foreign Ownership Limit
Foreign ownership of Vietnamese companies is limited to specified
maximum percentages. As of June 2010, the maximum limit for foreign ownership in listed or
unlisted companies is 49%, except for banks, which are subject
to a maximum limit of foreign ownership of 30%. There are no limits on
foreign ownership for bond investments and equity investments in private
companies.
Securities Trading Code
All foreign investors, except those whose investment is made solely through other investment funds, are required to obtain a securities trading code in order to be eligible to trade securities listed on the Vietnamese Stock Exchanges. In addition, foreign investors are only permitted to open one indirect investment capital account denominated in Vietnamese dong with a depository bank licensed to conduct foreign exchange business. All transactions must be carried out through this account.
Taxation
According to the current Law on Personal Income Tax (PIT), income gained from capital transfer or securities transfer shall be imposed a PIT of either 20% of total gains from capital transfer or securities transfer, or 0.1% of total value of the selling transaction of capital or securities.
Useful links on the Vietnamese equity market
