Investors frustrated
From the end of 2020, when the market liquidity soared to VND10 trillion - VND15 trillion, the HoSE automated trading system became congested, and it was difficult for investors to send buy and sell orders. Recently, this error happened more frequently, causing frustration to investors, significantly affecting the stock market. Specifically, in the trading session on Thursday last week, when the stock market was trading normally, the HoSE trading system suddenly faced network congestion, the price list displayed false information, even the stock prices on the trading floor jumped wildly.
Currently, the authorities are offering several solutions to prevent network congestion for the stock market, but in general, these are still situational solutions. According to the State Securities Commission (SSC), to completely solve this network congestion problem, it can only rely on the HoSE's new trading system. However, the commissioning of this trading system was delayed because Korean experts could not go to Vietnam due to the Covid-19 pandemic. Earlier, the HoSE signed a contract with the Korea Stock Exchange (KRX) to develop this trading system. According to the HoSE's plan, it will take four months to test the new trading system, and it will be put into operation by the end of 2021 at the latest.
While waiting for the new system to come into operation, the HoSE is consulting market members and investors on some solutions to unfreeze the trading system on the HoSE, such as increasing the round lot, and not allowing to modify and cancel orders. Of these solutions, the proposal to raise the minimum round lot on the HoSE from 100 shares to 1,000 shares to reduce the system load has raised controversy among investors.
Ms. Hoa Trieu, a small investor in District 7 in HCMC, said that after the HoSE increased the minimum round lot from 10 shares to 100 shares, with only 98 VHM shares in her account, she could not trade stocks anymore. According to regulations, investors who want to sell odd lots must sell them at the price floor - the lowest price that investors can buy stocks - and pay securities transaction fees and personal income tax to the securities company. However, even when they have to sell their stocks at a price lower than the market price, it is not always possible for them to sell. They have to wait until the securities company buys in before they can sell.
She added that in the past if she had about VND100 million, she could still invest in stocks of large-cap enterprises in the VN30-Index group. If the HoSE increases the minimum round lot to 1,000 shares, investors with little capital will be eliminated from the game. It will be difficult for them to have opportunities to invest in reputable companies in the market, whose market stock price is over VND100,000 per share.
Authorities should use domestic resources to resolve this problem
To reduce the system load, at the beginning of January this year, the HoSE raised the minimum round lot from 10 shares to 100 shares, but the trading system is still congested.
From the end of 2020, when the market liquidity soared to VND10 trillion - VND15 trillion, the HoSE automated trading system became congested, and it was difficult for investors to send buy and sell orders. Recently, this error happened more frequently, causing frustration to investors, significantly affecting the stock market. Specifically, in the trading session on Thursday last week, when the stock market was trading normally, the HoSE trading system suddenly faced network congestion, the price list displayed false information, even the stock prices on the trading floor jumped wildly.
Currently, the authorities are offering several solutions to prevent network congestion for the stock market, but in general, these are still situational solutions. According to the State Securities Commission (SSC), to completely solve this network congestion problem, it can only rely on the HoSE's new trading system. However, the commissioning of this trading system was delayed because Korean experts could not go to Vietnam due to the Covid-19 pandemic. Earlier, the HoSE signed a contract with the Korea Stock Exchange (KRX) to develop this trading system. According to the HoSE's plan, it will take four months to test the new trading system, and it will be put into operation by the end of 2021 at the latest.
While waiting for the new system to come into operation, the HoSE is consulting market members and investors on some solutions to unfreeze the trading system on the HoSE, such as increasing the round lot, and not allowing to modify and cancel orders. Of these solutions, the proposal to raise the minimum round lot on the HoSE from 100 shares to 1,000 shares to reduce the system load has raised controversy among investors.
Ms. Hoa Trieu, a small investor in District 7 in HCMC, said that after the HoSE increased the minimum round lot from 10 shares to 100 shares, with only 98 VHM shares in her account, she could not trade stocks anymore. According to regulations, investors who want to sell odd lots must sell them at the price floor - the lowest price that investors can buy stocks - and pay securities transaction fees and personal income tax to the securities company. However, even when they have to sell their stocks at a price lower than the market price, it is not always possible for them to sell. They have to wait until the securities company buys in before they can sell.
She added that in the past if she had about VND100 million, she could still invest in stocks of large-cap enterprises in the VN30-Index group. If the HoSE increases the minimum round lot to 1,000 shares, investors with little capital will be eliminated from the game. It will be difficult for them to have opportunities to invest in reputable companies in the market, whose market stock price is over VND100,000 per share.
Authorities should use domestic resources to resolve this problem
To reduce the system load, at the beginning of January this year, the HoSE raised the minimum round lot from 10 shares to 100 shares, but the trading system is still congested.
An investor watches the stock trading session on March 8. (Photo: SGGP)
Meanwhile, many experts said that the trend of the stock markets in many countries around the world, such as Japan and Singapore, is to reduce the minimum size of the trading lot. Even in developed stock markets, such as the US, the UK, and Italy, investors can place orders to buy an odd lot with volume from 1 to 99 shares. In the US stock market, investors even can also buy 0.1 shares. Reducing the size of the trading lot aims to increase market liquidity and help to attract more small investors. Besides the above solutions, the Hanoi Stock Exchange (HNX) has been planning to transfer some listed companies from the HoSE to the HNX to reduce the load. The SSC also requested the departments to quickly coordinate and support enterprises that wish to temporarily change the listing from the HoSE to the HNX. After a week of consulting member securities companies, the HNX said that the trial of creating a new trading board for stocks transferred from the HoSE had been carrying out. This board still complies with the HoSE’s trading regulations, such as session structure, daily trading limit, types of orders, price step, or trading lot. However, at the Prime Minister's meeting with typical entrepreneurs and intellectuals with the topic "Dialogue 2045" in HCMC on March 6, Ms. Nguyen Thi Phuong Thao, CEO of Vietjet Air, said that the plan to reduce the number of transactions because the trading system failed to operate normally or to transfer the listing of stocks from the HoSE to the HNX are unsatisfactory. Ms. Thao said that she had discussed with leaders of large domestic technology corporations, such as FPT, One Mount Group, and Viettel, and was told that with a cost of about VND60 billion and a duration of two months, it would be possible to solve this problem. Domestic enterprises and entrepreneurs are willing to share costs to jointly solve and reduce pressure on the budget. Mr. Truong Gia Binh, Chairman of FPT, also proposed the Prime Minister let domestic private enterprises handle technical issues of the HoSE. In response to the proposals of entrepreneurs, Prime Minister Nguyen Xuan Phuc asked the Ministry of Finance to study the opinions and quickly resolve the technological change of the HoSE so that network congestion will never happen again, without using the budget.
Last weekend, the leader of VNDIRECT Securities Company (VNDS) signed a document to the members of the Board of Directors, proposing the transfer of its VND shares from the HoSE to the HNX. It is the first enterprise to change the trading floor.
In the trading session on March 8, network congestion continued to occur on the HoSE, so in the second half of the afternoon trading session, the VN-Index was almost flat.
In the trading session on March 8, network congestion continued to occur on the HoSE, so in the second half of the afternoon trading session, the VN-Index was almost flat.
