On 1 December , the SET introduced new floor and ceiling price limits for trading. This was followed by revisions to the revenue code at the end of the year, allowing the investment of savings in the capital market.
Once registered, a securities transaction code is issued to the foreign investor that will permit securities trading. As of , there are thirteen licensed securities companies. Of these, nine have been licensed to conduct a full range of securities services including underwriting , brokerage , custody, research, portfolio management and trading. The minimum capital required to operate effectively as an investment bank was VND43b c.
This is the largest stock exchange of Vietnam at the moment. The total listed volume was The market capitalization was The highest record of Vn Index was on 12 March at 1, The Stock Trading Center of Vietnam is also the official mechanism through which new government bonds are issued, and it functions as the secondary market for a number of existing bond issues. Trading is conducted daily with two matching sessions: The State Securities Commission SSC , a body established formally in , is responsible for capital markets development, licensing of participants, and the issue and enforcement of regulations.
A wide range of regulations, with significant input from multilateral bodies such as the International Finance Corporation, have been promulgated, including those dealing with such issues as insider trading , take-over trigger points and margin lending.
Foreign invested joint venture companies are technically qualified to list, but to do so, they must be reorganized into joint stock company status. Companies intending to list must also submit to audit by an approved, independent auditing company.
The mechanism of trading on the Stock Trading Center of Vietnam is via an automated order matching system. It encourages the general public to become shareholders in a variety of local industries. Its main operations include securities listing, supervision of listed companies and information disclosure, trading, market surveillance and member supervision, information dissemination, and investor education. In this trading system, two principal methods of trading are available: SET CONNECT offers greater capacity and superior transaction speed, and provides the uses of industry standard interfaces, making it easier to accommodate linkage with other marketplaces to attract further liquidity.
AOM trading performs the order matching process without human intervention. After brokerage houses electronically send buy or sell orders from their offices to the SET mainframe computer, the ASSET system queues the orders and arranges them according to a price-then-time priority. This means orders are first grouped according to price, with the best price taking precedence.
Then, within each price group, orders are arranged according to time. In terms of the matching process, there are two methods: Continuous Order Matching procedures operate during the regular trading sessions. The ASSET continuously matches the first buy and sell orders in the queue, and at the same time, confirms each executed transaction via the member broker 's terminal.
Call market matching is used in calculating the opening and closing prices of a security at the opening and closing of trading. This method allows brokers to enter their orders to be queued for matching at a specified time at a single price that generates the greatest trading volumes for that particular stock.
ASSET also allows brokers to advertise their buy or sell interests by announcing bid or offer prices. Members may then deal directly with each other, either on behalf of their clients or for themselves.
Prices may be adjusted during the negotiation; hence, the effective executed price may not be the same as that advertised and may not follow the price spread rules. After concluding negotiations, dealers must send details of the results to ASSET for recording purposes. SET trading is conducted on all bank business days, normally from Monday through Friday. Each day there are five trading sessions: On 1 December , the SET introduced new floor and ceiling price limits for trading. The former limits allowed stock prices to fluctuate within a range of 10 percent, while the current limits allow prices of a stock to fluctuate within a range of 30 percent of the previous closing price on the main board.
However, if the market price is less than 1 baht, stock prices may fluctuate within a range of percent of the previous closing price. Ceiling and floor limits apply to each trading board utilizing the AOM system, with the exception of the foreign board.
Together with the introduction of the floor and ceiling trading limits, the SET also implemented a circuit breaker system to dampen any unusual volatility in the market that may cause investor panic.
The circuit breaker operates in two stages. First, if the SET index falls by 10 percent from the previous day's close, all trading in listed securities is halted for 30 minutes. Second, if the SET index falls by 20 percent from the previous day's close i. If the circuit breaker is in effect at the closing time of a session, trading resumes in the next session.
Recent study finds that "dealers predominantly sell to institutional accounts, creating a negative correlation between the two groups, in addition to strong institutional herding which is all indicative of potential agency problems on the exchange. Also find that local individual accounts practice negative feedback trading and the other groups practice positive feedback trading.
Of the four groups, the only group that influences the SET is the local individual group of investors. The foreign investor is found to be the least significant group on market returns, provide market liquidity to locals, and be the least responsive to daily market changes-following the prudent man rule. In addition to the SET Index, which is calculated from the prices of all common stocks on the main board, the SET also provides industry group indices and sectoral indices.
Both these types of indices are calculated from the prices of the common stocks which share the same fundamentals which characterize each particular industry group and sector, respectively. The index calculation methodology is identical to that of the SET Index, which is a market capitalization weighted index.
This means the larger the capitalization of a stock, the more its weight in the index. The industry group and sectoral index calculations are adjusted in line with the same factors that influence the calculation of the SET Index. These influencing factors include the shifting of a stock from one sector to another sector or the shifting of a stock from a sector in one industry group to a sector in another industry group. The base date of the industry group indices is on 31 December , which was when the industry group indices were established and set at points.
Smaller capitalized shares are underrepresented because both institutions and traders by their very mandate must avoid these due to liquidity constraints.
For this reason many smaller or mid-cap Thai stocks may be underpriced. Smaller companies in Thailand make up over 70 percent of its GDP and often have higher growth rates then the averages.
There is no Thai small cap index. From Wikipedia, the free encyclopedia.
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