Promote transparency on the stock market

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Transaction at Maybank KimEng Securities Company. (Photo: N.H).

A securities expert in HCM City said that Vietnam's stock market had quite a lot of companies operating in a “defrauding way” with many sophisticated tactics. The securities expert stressed that over the past 10 years, the increase of prices in the market capitalization was not commensurate with the increase of the number of shares. Accordingly, the contribution to the market primarily comes from several stocks with large capital. Many analysts stated that the belief of investors had been diminished dramatically. The largest sale of foreign investors in the past two months is the most obvious sign. For example, HAG share of Hoang Anh Gia Lai Joint Stock Company has fallen in price to the lowest level in history, but in every session, the sale of this stock is still very high. The acceptance of selling HAG share at a loss price shows that there is no belief for these shares at present. Sadly, HAG shares are not the only stocks falling in price on Vietnam's stock market recently.

Mr. Huynh Anh Tuan, the Director of SJC Securities Company said that, recently, the State Securities Commission has implemented several solutions to promote the transparency of listed companies in the field of training activities, create the provisions on the disclosure of information, especially the disclosure of information in English, etc. However, there are many problems with the transparency of the stock market. According to Mr. Tuan, there are currently many shares of enterprises with the price below the par value. This shows that these enterprises have not operated effectively in the transparency of information and building up trust with investors. Accordingly, many enterprises release a large quantity of shares for a short time, causing concern about risks for investors. Along with that, price-making also occurs quite commonly. Therefore, in order to enhance the protection of investors, in addition to monitoring and providing sanctions, the authorities should give warning to investors in a timely fashion.

According to the HCM City Stock Exchange (HOSE), in recent times, the listed companies on the stock market have had a significant breakthrough in information transparency and contributed to general transparency in the economy. Despite significant progress, there is still a big gap when compared to the international standards of the listed companies in the world. Transparency is a very simple concept, but the implementation of transparency standards requires the determination and coordination from authorities to companies. Specifically, companies need transparency in awareness and management of financial reports, equality between shareholders and transparency in the work of information disclosure. This transparency will create the core values ​​of sustainable development and attract capital efficiently, thereby creating stability and building the trust from domestic and foreign investors.

Therefore, in order to promote transparency on the stock market, HOSE said that in the future, it would continue to advise the State agencies in the management of the legal framework as well as restructuring and improvement transparency in companies. Specifically, Decree 60/2015/ ND-CP has institutionalized and accelerated the registration of the transaction, listing of equitized companies and public companies on the stock market; and Circular 155/2015/ TT-BTC has provided guidelines on the disclosure of information, especially the disclosure of information in English. In addition, the Decree on corporate management by the State Securities Commission will enhance the role and responsibilities of enterprises in transparency management in society.

Besides, the improvement of corporate management for the quality of shares on the HCM City Stock Exchange is a focus. The Best Annual Report Award and Sustainable Development Report Award which honor listed companies on the stock market has been in place for 9 years. The perception of investors and companies about transparency has gradually changed thanks to a series of workshops and annual training programs organized by the HOSE for listed companies and market participants.

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The HOSE currently is also studying the sustainability index to provide indicators of sustainable development of listed companies. On the basis of current regulations and international standards, the indicators of sustainable development will be a guide for listed companies to self-assess their operations and be a useful tool to distinguish companies in the same sector. Currently, the HOSE is developing sustainable development reports for the stock market in the financial year 2016.