Two investors look at stock prices on a laptop in HCM City. — Photo courtesy of Vietnambiz.vn
The chronic congestion on the Ho Chi Minh City Stock Exchange (HoSE) has caused losses for retail investors, making them insecure.
Instead of congestion, and errors, only in the afternoon or near the close like previously, errors are now occurring even in the morning.
For example, on March 5, just after the market opened, the security live board froze and failed to show realtime prices.
Nguyen Kha, a veteran investor in HCM City, said he punched in an order to sell HBC shares on March 3 when it jumped to above VND18,500 (US$804 million), but only half his order was matched, and in the next few days had to sell at below VND18,000 since he needed money, losing VND1,000 per share.
Another investor on HoSE said he has been in a constant state of insecurity recently and cannot do any other work after placing orders since one needs to watch the screen to see if the order is matched.
This insecurity has caused many investors to switch to trading on the Hanoi Stock Exchange (HNX) and UPCoM, causing shares there to skyrocket in terms of both price and trading.
On March 4 UPCoM saw trading worth VND1.7 trillion, twice the normal average.
Drastic solutions
To tackle the overload at HoSE, the State Securities Commission (SSC) said it is speeding up installation of a new trading system provided by the Korean Exchange (KRX).
Last week it instructed the temporary transfer of shares from HoSE to HNX to much acclaim from both investors and analysts, but a difficult task since listed companies need to get approval from their shareholders.
Besides, it could take securities companies one to two months to meet the technical changes involved in identifying the shares transferred to the HNX.
Some need even six to nine months.
Dr Nguyen Van Thuan of the University of Finance and Marketing told Thanh Nien (Youth) newspaper however that since this solution has the least impact on investors and companies, the SSC could make it not mandatory for companies to get approval.
The settlement between the two exchanges and securities companies is an internal issue, and so the switch could be accelerated, he pointed out.
If the problem lasts much longer, not only investors but also the stock market and the economy itself would suffer badly, he added. — VNS