Govt steps in on Hanoi's 1st trading

Govt steps in on Hanoi's 1st trading

HANOI (DPA): Vietnam's stock exchange finally began trading Friday, but regulators stepped in to cap rising share prices as buyers scrambled to find sellers during the historic opening day.

"Vietnam has successfully conducted its first stock trades," Tran Dac Sinh, deputy director of the Ho Chi Minh City Securities Trading Center (STC), told Deutsche Presse-Agentur (DPA) by telephone.

Sinh pegged the VN INDEX - Vietnam's first - at 100 points and said it would begin to move Monday as shares of the two listed firms, Refrigeration Electrical Engineering Corp (REE) and Cables and Telecommunications Material Co (SACOM) began trading hands.

REE's price was capped at 16,000 dong (US$1.13) per share, while SACOM was capped at 17,000 dong ($1.20).

"The market seemed too hot today, so we had to keep the share price of REE and SACOM down," Sinh said.

"Our intervention is aimed at preventing negative impacts on investor psychology on this historic first day."

Hundreds of private Vietnamese investors and more than a few corporate clients crowded into the six licensed securities firms to fill in orders before the opening 9 o'clock bell.

They found themselves scrambling to find sellers of the two stocks, the value of which analysts widely believe will rise dramatically over the next few weeks.

"Today was frantic but very impressive," said Jonathon Waugh, chief representative of British stock brokerage Jardine Fleming.

Traders expressed concern that the State Securities Commission (SSC), which governs STC operations, imposed a ceiling on the two stocks Friday after hinting that opening day trading would be unhindered so the two stocks could find their market price.

"Yesterday the assumption was there were to be no caps today," said Waugh. "One assumes control is dominating their thoughts at the moment."

Sinh said that supply and demand will determine market share come Monday, but the SSC has imposed a 5 per cent up-or-down fluctuation cap as a means of maintaining market stability.

Waugh and other analysts believe the market price may move up the full 5 percent per trading day over the next few weeks until enough share-holders decide to sell.

But analysts said trading volume will remain minimal unless the government, which currently holds 49 percent of Sacom shares and 10 percent of REE, decides to sell more shares.

Vietnam launched the STC on July 20 in what was widely seen as one of the communist country's most important steps towards market economics since it instituted dramatic economic reforms a decade ago.

Two other firms, Haiphong Paper Co and Transimex, have been licensed to list on the board but have yet to finalize formalities, authorities have said.

Trading is at first scheduled for Mondays, Wednesdays and Fridays.

An electronic trading board which earlier in the month had malfunctioned before and during trading test runs performed adequately, traders said.