Plans are in the works to merge Vietnam’s two stock exchanges into a unified Vietnam Stock Exchange headquartered in Hanoi.
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The proposal for the merger was submitted to the government by the Ministry of Finance late last week and has since “stirred debate,” writes Vietnam Net.
Since the Hanoi bourse – HNX went online in 2005 it’s played second fiddle to its bigger brother in the South - a recent report found that the “capitalization value of the companies on HOSE accounted for the overwhelming proportion -- 88 percent -- of the total market’s capitalization value by the end of 2014, equal to 25.5 percent of Vietnam’s GDP,” according to the paper.
Further, “securities analysts and investors cite figures about the trading volumes of HOSE, not HNX, and the VN Index, the indicator of HOSE, not HNX Index of the Hanoi bourse, when talking about the Vietnamese stock market,” it continued.
When Le Van Chau, Deputy Governor of the State Bank was tasked with creating the country’s first stock exchange 20 years ago, he picked Saigon over Hanoi due to the southern city’s economic prowess.
As many of the country’s financial service companies are located in Saigon, it will be interesting to see if a mass exodus to the capital occurs when/if the merger is approved.
While there’s likely more to the story going on behind the scenes, we just hope they don’t knock down the quaint colonial building that currently houses the HCM City Stock Exchange.
[Photo via Thanh Nien]
