An amended draft on listing requirements, made by the State Securities Commission, might increase the charter capital level necessary for companies to list on Viet Nam's stock exchanges, in an effort to improve the quality of investment options.


The draft regulates that a company seeking to list on the HCM City Stock Exchange should have a minimum charter capital of VND120 billion (US$8.9 million) while a company should have a minimum charter capital of VND30 billion ($1.5 million) if it wishes to list on the Ha Noi bourse.
Currently, a HCM City-listed firm must have a charter capital of at least VND80 billion while in Ha Noi, the figure is VND10 billion.
Nguyen Hoang Hai from the Viet Nam Association of Finance Investors who recommended the amendment in May, said that higher requirements would improve the investment environment by providing different options in different markets.
Vietnamese stock markets include the HCM City Stock Exchange, the Ha Noi Stock Exchange and the Unlisted Public Company Market. Each market has its own listing requirements.
In this way, investments would be more professional and investors could avoid high risks, he said, noting that regulators should keep a look out for poorly performing listed firms that made random share issues.
Le Hai Tra, a member of HCM City Stock Exchange's management board, concurred that it was high time to increase the listing standard to lure more capital from both domestic and foreign investors.
Companies would find it easy to raise capital through stock markets, Tra said.
However, many companies that are already listed will not be able to comply with the new requirements. To meet the updated criteria, many enterprises rushed to issue additional shares to increase their charter capital, which flooded the markets.