A PV Oil gas station. The company is trading shares on the Unlisted Public Company Market (UPCoM) with code OIL. (Photo: pvoil.com.vn)Hanoi (VNS/VNA) - Margin lending may be allowed on the Unlisted PubicCompany Market (UPCoM), the State Securities Commission (SSC) vice chairman PhamHong Son has said.
The Hanoi Stock Exchange (HNX) must make a list of stocks on UPCoM that arequalified for margin lending and submit the list to the SSC next week, he saidat a meeting with investment funds and securities firms.
The proposal will have to wait for the Ministry of Finance’s approval, the vicechairman added.
The Vietnamese stock market has been struggling in the last two months as fearsabout the spread of the novel coronavirus (COVID-19) have dampened investors’confidence in risky assets.
If the margin-lending proposal is approved, it would be a boost for thesecondary market, according to the SSC.
Brokerage and investment firms in recent media reports have expressed the ideathat the market regulator should allow investors and brokers to use marginlending.
Margin lending and other financial leverage activities, which have been forbiddenon UPCoM since the market’s opening in mid-2009, as the rules on UPCoM are lessstrict than those on the Ho Chi Minh and Hanoi stock exchanges.
There have been several cases in which UPCoM-traded companies’ leaders arecharged with stock price manipulation, causing losses for investors.
In recent years, many large-cap companies that are good enough to list shareson the two stock exchanges have debuted on UPCoM, such as the AirportsCorporation of Vietnam (ACV), Viettel Global, the Vietnam Engine andAgricultural Machinery Corporation (VEAM), the Vietnam Rubber Group, MasanConsumer, the Investment and Industrial Development Corporation (Becamex), BinhSon Refining and Petrochemical Corporation (BSR), FPT Online, PetroVietnam Oil,Masan MeatLife and Viettel Post.
The companies’ shares reacted well to the news. ACV and FPT Online sharesjumped 4.3-4.6 percent on March 5, while shares of Viettel Global, PetroVietnamOil and VEAM gained between 0.8 percent and 1.5 percent.
The secondary market tracker UPCOM-Index inched down 0.16 percent to endThursday at 55.45 points. The index has lost a total of 1.37 percent since themarket’s post-Tet (Lunar New year) reopening on January 30.
The benchmark VN-Index on the Ho Chi Minh Stock Exchange has plunged a total ofnearly 10 percent in the same period while the HNX-Index on the Hanoi StockExchange has shed about 8.23 percent./.
VNA
