Hanoi Stock Exchange Research Articles

Transaction Costs and Liquidity Co-Movements within and Across Exchanges: Evidence from Vietnam

Employing a sample of all domestic stocks listed on the two Vietnamese stock exchanges – Hochiminh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX) over the 2007-2014 period, we find that the transaction costs for HOSE-listed stocks are about half of those for HNX-listed stocks. This difference persists over the sample period, across most industries, and is smaller with size. We also provide evidence of both within and cross-exchange liquidity co-movements in both Vietnamese stock exchanges. However, we do not find that co-movements in liquidity are stronger in HOSE than HNX, and vice versa. Our findings are important to many parties including exchange regulators, and domestic and international investors in Vietnam.

Corporate Restructuring in Vietnam: An Analysis of Asset Restructuring

Corporate restructuring is likely to be approached from various aspects. In this paper and in the context of Vietnam, it is inspected via asset restructuring. Using both financial and non-financial indicators of 226 listed firms on Hochiminh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX) over the 2007–2014 period, this paper investigates: (i) the determinants of corporate restructuring in Vietnam; and (ii) the effects of corporate restructuring on corporate performance. Empirical findings show that: (i) the fact that an enterprise conducts its restructuring plans primarily depends on its performance, and ownership concentration has a negative impact on the process of restructuring; (ii) a board with the presence of outside directors has positive and statistically significant effects on the performance of the firm, and foreign holdings lead to subsequent performance improvement.

Working capital management and firm profitability during a period of financial crisis: empirical study in emerging country of Vietnam

This paper analyzes the relationship between working capital management and profitability from operations of 121 firms listed on the two stock exchanges, i.e. Hanoi Stock Exchange (HNX) and Ho Chi Minh Stock Exchange (HOSE) in the period 2008-2012. The research result has indicated that Receivables Collection Period (RCP), Ratio of debt to total assets (LEV), Current Ratio (CR) has negative correlation; whereas Growth of Sales (GOS) and Size of Companies (SIZE) have positive with the firm’s return on equity (ROE). The research findings of researches provide experimental evidence to confirm the important role of working capital management that has direct effect on profitability of firms. Particularly in financial crisis, the managers should accord a particular attention on solutions concerning Receivables Collection Period; by justifying the Leverage and Current Ratio at reasonable level; by enhancing measures for increasing the growth of sale in order to stabilize the firm

Yangon’s New Stock Exchange in Comparative Analysis

In the political sphere, the citizens of Myanmar have witnessed and taken part in an expanding and deepening process of democratization and political liberalization in the past few years. In the economic sphere, changes are also underway that indicate a growth of economic liberalism. One part of that process is a slowly increasing financialization as indicated by the new Yangon Stock Exchange (YSX) set to begin trading operations in late 2015. This paper will analyze what this new stock exchange means for the citizens of Myanmar by placing it within a regional comparative analysis of stock markets across Southeast Asia, including the Ho Chi Minh City Stock Exchange (HoSE), the Hanoi Stock Exchange (HNX), the Lao Securities Exchange (LSX), and the Cambodia Securities Exchange (CSX). The main argument is that despite calculable risks in terms of business transparency and national politics, the potentialities for a successful YSX are in place. The main socioeconomic conditions that warrant investment, both from the domestic as well as international perspective are 1) the depth and diversity of Myanmar’s adult population size, 2) Myanmar’s rallying industrial sector, 3) Burmese businesses’ current lack of bank financing, and 4) Burmese citizens’ little-to-no holdings in financial assets as compared to other non-financial wealth holdings. The YSX will not be an overnight success for either domestic Burmese investors or for domestic Burmese enterprises seeking new avenues to finance growth and project investment. However, the systemic socioeconomic conditions are in place for the Yangon Stock Exchange to parallel more closely the experience of the Vietnamese HoSE and HNX than that of the other Indochinese exchanges of LSX and CSX.

Triangle Relationships among Ownership Structure, Dividend Policy and Firm Performance: An Empirical Study in Vietnamese Companies

This paper studies the triangle relationships among ownership structure, dividend policy and firm performance by investigating 34 Vietnamese companies in Construction and Construction Material industries which are listed on Hanoi Stock Exchange, Ho Chi Minh Stock Exchange, and UPCOM Stock Exchange over the period from 2011-2013. The paper studies ownership concentration, dividend payout ratio, and two measures of firm performance, namely Price to Earnings (P/E) ratio and Return on Asset (ROA). Pooled Ordinary Least Squares Model and Fixed Effect Model were used to examine three relationships between: (i) ownership concentration and dividend policy, (ii) dividend policy and firm performance, and (iii) ownership concentration and firm performance. Ownership concentration is found to increase the level of dividend payout. Dividends are positively correlated with both P/E ratio and ROA. Finally, ownership concentration is found to have negative impacts on P/E ratio but no significant impacts on ROA.

The role of the Vietnam securities market as a capital mobilization channel

This paper attempts to evaluate the role of Vietnam securities market as a capital mobilization channel for the economy through the activities on the primary market in the period between 2005 and 2013, focusing on Hanoi Stock Exchange. A summary of the establishment, development and operations of the secondary market in the period from 2005 to 2013 with information of size, liquidity of both stock and bond markets is also included. Through the analysis the efficiency of capital mobilization on the primary market, we find that the securities market is yet to become an efficient capital mobilization channel for companies. Therefore, in order for the securities market to develop safely and become an efficient capital mobilization channel, authorities need to have promoting policies, enhance the quality of market participants as well as the governance and operations of listed companies.

Effects of state ownership on companies’ capital structure and profitability: Estimation analysis before and after the Lehman shock

This paper investigates the capital structure and profitability of the companies listed on the Ho Chi Minh Stock Exchange (HOSE) and the Hanoi Stock Exchange (HASE) in Vietnam by estimating their debt ratios and return rates using the three-stage least squares method applied to the 2006–2011 samples of 435 listed companies. The estimation results show that first, the capital structures of the listed companies matched the features of standardized corporate financing theories better than those of small- and medium-sized Vietnamese enterprises. Second, weak corporate governance due to insufficient monitoring by creditor led the listed companies to borrow excessively in the periods before and after the boom. Third, the state-controlled companies listed on the HOSE are likely to have an advantage over other companies in accessing loans and earning profits, even after the boom period. Fourth, while foreign-affiliated companies were not substantially more profitable during the boom period, they were more profitable in the period after the boom because of better production technology and management. These findings suggest that reforming the Vietnamese market requires the development of a system that ensures information transparency and independent corporate governance, enhances financial openness, and increases the privatization of state-owned companies, including those in the banking sector.

Study of Hanoi and HoChiMinh Stock Exchange by Econophysics Methods

The econophysics methods are used to study the financial fluctuation of Hanoi Stock Exchange (HNX) and Hochiminh Stock Exchange (HSX) in comparison to Dow John Industrial Average's one. The study has been made both on panic period (2007-2008) and on normal time of theses stocks. The results point out that for the period under consideration, the distribution of returns tends to be Student distribution. There exists an analogy between non-equilibrium phase transitions and financial market movement. Thus it is hypothesized that financial markets undergo self-organizing when the external volatility perception rises above some critical value, the distribution of signs of returns is to be similar to a second order phase transition. The results obtained by econophysics method have quite good agreement with the ones obtained by other economy analyzation methods.

Determinants of Capital Structure in Vietnam

This study examines role of various financial variables in determining the capital structure of Vietnamese firms. Although some prior research were conducted within the same context (Nguyen, 2010; Nguyen et al., 2012), they limit testing the contribution of certain firm leverage’s indicators (non-debt tax shields, tax or volatility), which have been found significant at international setting. Besides, the sample period is updated to 2012 in order to capture post-recession effects on capital market if there were any. It is evident from analyses that there are remarkable changes in capital structure’s determinants compared to empirical results. By observing gearing level of 621 non-financial firms listed on either Hanoi Stock Exchange or Ho Chi Minh Stock Exchange, the study suggests that majority of independent variables share effects aligning more closely with patterns found in well-functioning capital markets, such as U.S. or U.K. This contradicts to prior results found in Vietnam, and confirms the belief that recent recovery in the aftermath of financial crisis has been making impact on Vietnamese firms’ financing decisions. It also implies that Vietnamese firms should give more scrutiny and oversight on planning their long-term rather than short-term capital structure.

Determinants of the Capital Structure of Listed Vietnamese Companies

This paper provides the first insights into the capital structure of listed companies in Vietnam, one of the most dynamic economies in the Asia-Pacific region. We employ a panel GMM (generalized method of moments) system estimator to analyse the determinants of the capital structure of non-financial firms listed on either the Ho Chi Minh Stock Exchange or the Hanoi Stock Exchange for the period 2007–11. We conclude that, despite the emergence in recent years of equity and a corporate debt capital market, the capital structure of Vietnamese enterprises is still dominated by the use of short-term financing sources. Further, our results show that state-controlled enterprises continue to have preferential access to finance and that high-growth firms still rely principally on external debt rather than equity issuance. These results indicate that policy-makers need to continue to pursue policies that will deepen capital markets and ensure that bank finance is allocated on a purely commercial basis.

Corporate Ownership and Firm Performance in Emerging Market: A Study of Vietnamese Listed Firms

Using data from Ho Chi Minh Stock Exchange and Hanoi Stock Exchange during the period of 2007 and 2012, this study examines the effect of corporate ownership (state ownership and foreign ownership) on firm performance. The empirical findings from fixed effect models show that while state ownership has an inverted U-shaped relationship with firm performance, foreign ownership has a U-shaped relationship with firm performance. These results imply that when ownership is concentrated, while state ownership lower firm performance, foreign ownership enhance firm performance.

Corporate Governance Quality: Vietnam Needs to Implement Economics, Business and Geopolitics University Courses

To assess corporate governance quality is the need of most board directors and other stakeholders, since such assessment is good foundation for next improvement plans. In an effort to meet such demand, this article will introduce 2011-assessment of corporate governance quality of companies listed in Hanoi stock exchange (HNX) based on Gov-score criteria. The findings from a two-step survey show that corporate governance quality of HNX companies is at medium level (25.73/51), only meets minimum requirements by current legal provisions. To raise the corporate governance quality, the author suggests two solutions. The first is to consider framework improvement the leverage for enhancing corporate governance quality at company level, and the second is to promote corporate governance education for all related groups. The second solution will be most effective if it is targeted at business undergraduate students to enable them understand why corporate governance right from their career start, so we suggest to incorporate the subject as an important course for business undergraduate students in their final school year.

Financial Development and the Determinants of Capital Structure in Vietnam

This paper explores the capital structure of listed Vietnamese companies in the broader context of financial development (the recent expansion of domestic equity and debt capital markets). Accordingly, the paper provides the first insights into the capital structure of listed companies in one of the most dynamic economies in the Asia-Pacific region and in an economy that has experienced rapid change in recent years. We employ a panel GMM (generalized method of moments) system estimator to analyse the determinants of the capital structure of 116 non-financial firms listed on either the Ho Chi Minh Stock Exchange or the Hanoi Stock Exchange for the period 2007-2010. From this analysis we conclude that despite the emergence in recent years of equity and (to a lesser extent) corporate debt capital markets, the capital structure of Vietnamese enterprises are still dominated by the use of short-term financing sources. Further, our results show that state controlled enterprises continue to have preferential access to finance and that high growth firms still rely principally on external debt rather than equity issuance. These results indicate that policymakers need to continue to pursue policies that will deepen capital markets and ensure that bank finance is allocated on a purely commercial basis.

Organisational culture and trust as organisational factors for corporate governance

This inquiry into listed companies at Ho Chi Minh City Stock Exchange and Hanoi Stock Exchange in Vietnam aims to detect if such constructs as organisational culture and trust act as antecedents for robust corporate governance. About 286 responses returned from self–administered structured questionnaires despatched to 853 middle level managers were dissected via structural equation modelling. From the findings emerged the interconnections between all organisational culture types and calculus–based trust. Adhocracy culture or market culture, on the other hand, tends to cultivate not only merely calculus–based trust but also knowledge–based trust and identification–based trust, which in turn positively influence corporate governance.