State Securities Commission cautions investors on delisted stocks

Investors watch the market and conduct transactions on a trading floor of a securities firm in Hà Nội. — VNA/VNS Photo

HCM CITY — The State Securities Commission (SSC) has issued a warning to investors about the risks associated with delisted stocks.

The SSC’s Securities Market Development Department have advised investors to understand mandatory delisting regulations to minimise potential financial losses.

“Only companies with strong operational performance and legal compliance are likely to succeed in the securities market,” the department stated.

Delisted stocks are currently tradable on the UPCoM market, which allows a trading band of 15 per cent, compared to a 7 per cent limit on the Hồ Chí Minh Stock Exchange.

Stocks that are delisted must remain on UPCoM for at least two years before reapplying for relisting.

Delisting can occur voluntarily or involuntarily due to non-compliance with listing requirements, including regulatory issues and financial instability.

Each exchange, including the Hồ Chí Minh Stock Exchange (HoSE), has specific guidelines for maintaining listing status.

Investors should exercise caution and rigorously assess the viability of delisted stocks, considering market conditions that may lead to wider bid-ask spreads and lower prices.

Recently, the Hồ Chí Minh City Stock Exchange (HoSE) has mandated the delisting of Hòa Bình Construction (HBC) and HAGL Agrico (HNG) effective September 6 due to poor performance.

HBC reported a cumulative loss of VNĐ3.24 trillion, exceeding its charter capital of VNĐ2.74 trillion, and has faced losses for two years amid a stagnant real estate market.

Similarly, HNG has incurred losses for three years, with negative after-tax profits totaling over VNĐ5 trillion from 2021 to 2023.

Following the delisting announcement, HBC shares dropped over 30 per cent to below VNĐ5,000, while HNG fell more than 20 per cent before recovering to VNĐ4,390. — VNS