State Securities Commission cautions investors on delisted stocks

The SSC’s Securities Market Development Department have advised investors to understand mandatory delisting regulations to minimise potential financial losses.

“Only companies with strong operational performance and legal compliance are likely to succeed in the securities market,” the department stated.

Delisted stocks are currently tradable on the UPCoM market, which allows a trading band of 15%, compared to a 7% limit on the Ho Chi Minh Stock Exchange.

Stocks that are delisted must remain on UPCoM for at least two years before reapplying for relisting.

Delisting can occur voluntarily or involuntarily due to non-compliance with listing requirements, including regulatory issues and financial instability.

Each exchange, including the Ho Chi Minh Stock Exchange (HoSE), has specific guidelines for maintaining listing status.

Investors should exercise caution and rigorously assess the viability of delisted stocks, considering market conditions that may lead to wider bid-ask spreads and lower prices.

Recently, the Ho Chi Minh City Stock Exchange (HoSE) has mandated the delisting of Hoa Binh Construction (HBC) and HAGL Agrico (HNG) effective September 6 due to poor performance.

HBC reported a cumulative loss of 3.24 trillion VND, exceeding its charter capital of 2.74 trillion VND, and has faced losses for two years amid a stagnant real estate market.

Similarly, HNG has incurred losses for three years, with negative after-tax profits totaling over 5 trillion VND from 2021 to 2023.

Following the delisting announcement, HBC shares dropped over 30% to below 5,000 VND, while HNG fell more than 20% before recovering to 4,390 VND.

HBC Chairman Tran Ba Duong expressed disagreement with the delisting rationale, assuring stakeholders of continued transparency and potential stock price recovery./.