HNX to apply reference price to stocks on first trading date
Currently, under regulation, the Hanoi Stock Exchange (HNX) does not apply reference price and price fluctuation limit on the first trading date of newly listed or newly registered for trading stocks; and on the first retrading date of stocks that have been suspended from trading for over 25 sessions or stocks that have over 25 consecutive non-trading sessions.
This regulation has been assessed as effective when reference price on the first trading date reflects the real demand and supply of the market on the first trading date and trading price is formed objectively through market supply and demand.
However, when applying the above regulation, HNX has found that some investors have set unreasonable prices (too high or too low) compared to the value of the stocks, which has affected the reference price defining on the following trading days and caused the index to not truly reflect changes of trading on the market.
To minimise these cases, HNX proposed to revise some provisions of the regulation on trading, in which reference price and price fluctuation limit on the first trading day will be applied, applicable on both listed market and UPCoM.
Accordingly, for listed market, reference price on the first trading date is proposed by the listed organisation and consulting unit (if any) and approved by HNX.
If weighted average price could not be defined in three consecutive trading days since the first trading day, to be used as reference price on the next trading day, listed organisation and consulting unit (if any) would have to redefine the reference price.
Price fluctuation limit on the first trading day of newly listed stock is plus or minus 30 percent compared to the reference price.
For listed stocks that have been suspended from trading for over 25 sessions, reference price will be decided by HNX, after being approved by the State Securities Commission, price fluctuation limit of plus or minus 30 percent is also applied.
For UPCoM, reference price on the first trading date is proposed by organisation registered for trading and approved by HNX.
Price fluctuation limit on the first trading date of newly registered for trading stock is plus or minus 40 percent compared to reference price.
For registered stocks having over 25 consecutive non-trading sessions, on the first day of retrading, HNX will apply fluctuation limit of plus or minus 40 compared to reference price of the latest trading day.
This plan is planned to be applied on UPCoM from April 2011 and on listed market from May 2011.
Tags: Vietnam companies, Vietnam stock news