Encouraging increased speculation is inviting destabilization, says an officer of the HCMC Open University.


The State Securities Commission (SSC), the country’s
stock market regulator, is consulting investors and brokerages on
allowing trading of stocks through accounts at different brokerages,
and buying and selling one stock in one trading session instead of
having to wait until the next day.


Thanh Nien caught up with Dr. Nguyen Van
Thuan, dean of the Ho Chi Minh City Open University’s accounting,
finance and banking faculty, to discuss this move.


Excerpts from the interview:


Nguyen Van Thuan: Opening trading
accounts at more than one brokerage is something that should be
allowed. It will offer investors a chance to get to know which
brokerage is the best for them. Besides, it’ll also help investors
regain some money from the capital gains tax they’ll have to pay next
year.


At present, the SSC doesn’t allow investors to do that
so they circumvent the ban, having their friends or relatives open
accounts for them. But once the capital gains tax takes effect, losses
on one account cannot be offset by gains on others.


Thanh Nien: But many investors are concerned that
opening accounts at different brokerages will see “trick trading.” What
do you think?


Nguyen Van Thuan: “Trick trading”
requires huge financial resources and different trading accounts. But
allowing investors to open accounts at more than one brokerage will
make “trick trading” easy to discover. Therefore the approval for
opening accounts at different brokerages will help the marketplace to
grow more steadily.


Thanh Nien:What is your opinion about the suggestion to allow investors to purchase and sell stocks in one trading session?


Nguyen Van Thuan: I don’t think this
is a good idea. Allowing buying and selling within one trading day will
encourage investors to speculate on stocks, causing the market to
fluctuate strongly. Foreign stock markets allow investors to do so
after the market has achieved stability already.


Thanh Nien:What should market regulators do to stop “trick trading?”


Nguyen Van Thuan: Market watchdogs
should set up a computer program that can highlight an account or a
group of accounts trading one stock repeatedly during a certain period.
Then it can inspect and follow up on the suspicious accounts
immediately. The market watchdog should also learn from foreign
counterparts’ experience in stopping “trick trading” and insider
trading.