Stricter Listing Requirements Proposed for Hanoi and Ho Chi Minh City Stock Exchange
May 14 – The Vietnam Association of Financial Investors (VAFI) is proposing that stricter listing requirements for companies wanting to enter the Hanoi and Ho Chi Minh City stock exchange be written on the draft amendment of the Law on Securities.
The organization suggests that companies that want to list shares on the HCM City Stock Exchange must have a minimum charter capital of about US$6.3 million with a ratio of net profits-to-charter capital of at least 20 percent for three consecutive years before listing.
In addition, companies wanting to enter the Hanoi Stock Exchange must have a minimum charter capital of US$2.1 million to US$2.6 million with an average ratio of profits-to-capital of at least 10 percent.
“Raising listing requirements will help remove unsound companies and diminish investor risk,” VAFI general secretary Nguyen Hoang Hai told Vietnam News. Presently there are a total of 519 listed companies on both stock exchanges with 200 of these companies confirming plans to boost charter capital this year.
VAFI also suggest that listings of companies reporting losses for three consecutive years should have their listings canceled. Listed firms should also be required to profits on capital of over 15 percent on the southern bourse and 10 percent on the northern for the first five years after listing, Hai added. This stipulation will force newly-listed companies to pay attention to the quality of their corporate management.
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