Vietnam raises capital requirement for new stock market listings

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Vietnam will raise the capital requirement for companies seeking to list on its two exchanges from September.

Companies planning to sell shares for the first time on the Ho Chi Minh City Stock Exchange, the country's biggest bourse, will need to have at least VND120 billion ($5.7 million) in registered capital, compared with the existing VND80 billion, according to a statement posted on the government's website today. The minimum limit for companies targeting the Hanoi Stock Exchange will rise to 30 billion dong from VND10 billion, according to the statement.

"This is a necessary step to increase the quality of listing companies," Giang Trung Kien, Hanoi-based head of research at FPT Securities Joint-Stock Co. said by phone on Tuesday.

Vietnam's stock market is classified by MSCI Inc. as one of the frontier markets, which typically have smaller market values and less liquidity than emerging counterparts. Vietnam's market value of $37.7 billion is less than half that of Walt Disney Co., based in Burbank, California. The benchmark VN Index has gained 18 percent this year after tumbling 27 percent in 2011.

Companies seeking to list on the Ho Chi Minh City Stock Exchange will also need to have had a return-on-equity ratio of at least 5 percent in the prior year, according to the statement. The new measures take place from Sept. 15, it said.

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