Friday, March 29, 2024 1:29:13 PM - Markets open
VN-INDEX 1,286.33 -3.85/-0.30%
HNX-INDEX 243.19 -0.73/-0.30%
UPCOM-INDEX 91.45 -0.03/-0.03%
Delisting poor quality shares helps make market more transparent
Vietnamnews - 9/13/2022 1:57:35 PM
 (0 ratings. You must sign in to rate.)
Delisting shares on the stock market is a tool for market regulators to create a transparent investment environment, and filter and remove poor quality stocks that cause market manipulation, strengthening investors' confidence in the stock market.
 
An investor, Nguyễn Ngọc Hưng, told Việt Nam News Agency that businesses who have shares delisted from the market must be strictly dealt with, but investors who bought shares of that business would be affected and there should be a mechanism to protect them.
 
According to statistics from the Việt Nam Securities Depository (VSD), since the beginning of this year, 18 companies have cancelled their share listings on HOSE and HNX to switch to the Unlisted Public Company Market (UPCoM). Notably, there are more than 70 enterprises having their status as public companies cancelled and leaving the stock market.
 
Huỳnh Anh Tuấn, General Director of Đông Á Bank Securities Joint Stock Company, said that many of the delisting cases were related to information disclosure, business results seeing losses for three consecutive years, or accumulated total losses exceeding the amount of charter capital.
 
When a stock is in danger of being delisted, the stock price plummets and will reflect most of the intrinsic value of the business. When transferring the listing to UPCOM, shareholders will not have much access to information about the business. The UPCOM has low disclosure and financial reporting requirements. Most new businesses will have to publish financial statements after an entire year. However, there are still many businesses seeing their shares increase after switching to UPCOM.
 
“Investors must define the purpose to invest in stocks, if it is not clear, it is best to cut losses on delisted shares. If the problems that cause businesses to delist and change the exchange are not so serious, not leading to bankruptcy, there is still hope for investors to wait,” Tuấn said.
 
Lawyer Nguyễn Thanh Hà, Chairman of the Board of Directors of SBLAW Law Firm, said that according to current regulations, shares are delisted, but still meet the condition of a public company, and must register for transactions on the UPCOM system.
 
Enterprises whose shares are subject to mandatory delisting may only register to list again after trading for at least two years on UPCOM and fulfilling the obligations of the listing organisation.
 
After a stock is delisted, two cases occur. With shares that will be transferred to other exchanges after being delisted, if they move to a larger exchange, the number of shares held by investors will be converted to the new exchange and traded normally.
 
If they are transferred to a smaller market, these stocks can still be registered for trading to maintain liquidity. However, if an enterprise's business deteriorates and there is a risk of bankruptcy, the result will be a serious decline in liquidity.
 
As for unlisted shares that are not transferred to other floors, it is very difficult for investors to transfer their shares. At that time, there are two ways to protect investors' interests. That is, the company issuing the shares must spend money to buy back these shares or the State Securities Commission will request that the shares be transferred to an unofficial or secondary exchange so that investors can continue selling them.
 
“Shares being delisted does not mean they are no longer valuable. Investors should also find out if the business activities of the enterprise are able to recover,” said lawyer Nguyễn Thanh Hà.
 
Deputy General Director of Kiến Thiết Securities Company Đỗ Bảo Ngọc said the stock market always had a process of screening businesses over time. Only companies with good performance and compliance with securities laws are eligible for long-term listing.
 
For companies that do not comply with the law, removing them from the listing would also help reduce risks for new investors, he said.
 
According to this expert, when a business is delisted, it will negatively affect both businesses and investors. Specifically, businesses are adversely affected by their reputation and brand image in the eyes of partners and investors. The value of shares and the company's capitalisation will decrease sharply when the information is released to the market, he said. VNS
 
Read original article here
 
Newer News
23/03 Shares sustain gains on strong investor confidence
20/03 Vietnamese securities companies race to boost capital amid high market demand
19/03 Large-caps pressured as increased profit-taking drives share decline
18/03 Market likely to be affected by Fed's meeting this week
18/03 Investors show strong interest in dividends at annual shareholders' meetings
15/03 VN-Index corrects, liquidity stays high
14/03 Stock Market Upgrade Journey: overcoming hurdles and reaching new heights
13/03 Market rebounds from cautious sentiment
12/03 Losses in bank stocks weigh on market sentiment
12/03 ETFs continue to see strong outflows of foreign capital
Older News
09/09 Shares extend losses as major industries lose ground
06/09 Việt Nam one of world's best performing stock markets in August
05/09 Securities companies’ race heats up amid low market liquidity
30/08 Corporate bond issuance declines in the first six months
25/08 Shares rise for second day, propelled by food stocks
23/08 Shares slide on heavy selling force
17/08 Market struggles as big stocks diverge
09/08 Investors' risk appetite continues to improve this week
09/08 Shares open the week higher on banking sector
09/08 New securities accounts hit near two-year low in July
 
Newsletter Signup
Top Stories
Shares sustain gains on strong investor confidence
Banks given advantages to CASA ratio
Man owes bank nearly VNĐ9 billion in credit card's interest after 11 years
VN-Index corrects, liquidity stays high
Stock Market Upgrade Journey: overcoming hurdles and reaching new heights
Market Update
Last updated at 1:25:01 PM
VN-INDEX 1,286.33 -3.85/-0.30%
Real-time chart
Top 5 Actives
Top 5 Gainers
Top 5 Losers
My Favorite Quotes
Your most recently viewed tickers will automatically show up here if you type a ticker in the Get Quotes box on the top of the page.
Company Research
Type in the symbol above for thorough background information, key statistics and financial information.
Stock Sectors
We continuously improve our services, here are the latest updates...
Portfolio
Allow you to monitor a customised group of securities. You can set up multiple Portfolios to help you better manage your investments.
Trigger Alerts
Get up-to-date alerts delivered directly to your email address.
Stock Screener
Allow you to filter the market and find exactly what sort of company you are looking for.
Live Terminal
Get instant access to FREE REAL-TIME streaming quotes for hundreds of stocks from HOSE, HNX and UPCOM exchanges.