HNX to ask for margin trading on UPCOM
The Ha Noi Stock Exchange (HNX) will continue petitioning State management agencies this year to consider allowing margin trading on the Unlisted Public Company Market (UPCoM).
According to HNX, a list of certain shares meeting requirements related to business performance, corporate governance as well as operational information transparency may be eligible for margin trading purchases on UPCoM. — Photo cafef.vn
Margin trading allows investors to buy more stock than they would be able to normally.
HNX, which operates and manages the UPCoM, said the move aimed to meet the needs of investors, improve market liquidity and increase the space for securities companies to diversify.
If the proposal were to be accepted, the HNX said certain shares meeting requirements related to business performance, corporate governance and operational information transparency would be eligible for margin trading on UPCoM.
There are now nearly 900 enterprises trading on UPCoM, but transaction value last year reached only VND295.3 billion (US$12.7 million) per session, a sharp decrease compared to the figure in 2018 of more than VND375 billion.
The low liquidity on the UPCoM was attributed to concerns about the transparency of enterprises as well as the reliability of information disclosed by the businesses, a representative of the HNX told news site tinnhanhchungkhoan.vn.
“However, on UPCoM, there are still businesses with good business performance, high dividend payout and high management quality, even much better than some businesses whose stocks are listed on the HOSE and HNX,” he said.
“Market regulators should consider allowing margin trading on UPCoM this year, for a specific number of stocks as this not only meets the legitimate expectations of investors but also contribute to improving market liquidity”, he said.
Some stocks which meet the conditions for margin trading included the Airports Corporation of Vietnam (ACV), Binh Son Refinery and Petrochemical Joint Stock Company (BSR) and the Viet Nam Engine and Agricultural Machinery Corporation (VEA), he said. — VNS
Foreign investors in January bought a total net value of VND46 billion (nearly US$2 million) worth of shares on the Unlisted Public Company Market (UPCoM).
Although the Unlisted Public Company Market attracts less attention from investors than the HCM and Ha Noi stock exchanges, the market still offers potential opportunities for market players who thoroughly understand it.