OTC market likely to be lit

23/11/2007 00:00:00 - views: 2,563

From the end of the next first quarter, 30 unlisted companies will have their shares exchanged through securities companies instead of direct transactions among investors in such unlit OTC market at present. Thus, investors must pay an equivalent fee to listed stock price.

Ministry of Finance has approved a project on organizing and managing transactions of unlisted securities of public companies. Accordingly, unlisted securities will be registered to be traded by securities companies. And exchange results will be totalled up at a Securities Trading Center (e.g. HASTC) then balanced at a securities registration center.

                  

Pursuant to this project, an investor needs open an account at a securities company. In case he or she has already opened an account for listed securities, he or she can use it for his or her OTC securities transactions. The account will be divided into two articles for listed and unlisted securities.
At the next first quarter’s end, it is planned that 30 unlisted companies in fields of banking, securities and insurance have their securities traded on Hanoi Securities Trading Centre (HASTC). Like listed companies, those companies will have to pay an annual transaction fee and a first registration charge. Investors will also have to pay a fee as they transact in listing market.
Unlike the first method that used reference price and price movement band, the recently approved method is that stocks registered at HASTC will be traded at a price movement band which is twice as much as listed stocks, i.e. 20%. Stock’s par value is VND 10,000, and bond’s is VND 100,000.
HASTC revealed that if they set such a limited price, investors will likely price too high or too low, even at zero dong which makes computer system unable to process and hung up. The organization will calculate and announce reference price based on weighted average of traded prices. Nevertheless, at present, HASTC has not agreed on collecting how many traded prices for how long they are.
Deputy Director of HASTC, Mr. Nguyen Vu Quang Trung, said that the organization would have electric board hanged to present prices, the most recent trading volume, as well as current purchase prices and offer prices of trading securities. At the same time, those companies with registered securities must publicize their information not quarterly like listed companies, but annually.
Mr. Trung also unveiled that HASTC plan to classify securities because unlisted securities liquidity is much more different. Accordingly, while stock codes with high liquidity will be gathered to identify reference price on the basis of weighted average, those with low liquidity will follow HASTC’s preparatory plan.

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