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Mar 04, 2024 / 15:50

HOSE pilots KRX-developed trading system

The implementation of the new trading system is poised to play a key role in the Vietnamese stock market's upcoming upgrade to emerging market status by 2025.

The Ho Chi Minh City Stock Exchange (HoSE) announced that it will migrate to the new information technology system developed by the Korea Exchange (KRX), South Korea’s bourse operator, on March 4-8.

 An investor at a securities company in Hanoi. Photo: Pham Hung/The Hanoi Times

Following the transition, HoSE has requested securities firms to prepare their systems for the KRX system. As part of the transition, system checks and cutover tests will be conducted on March 7. Between March 11 and 15, securities firms will conduct order entry tests to ensure seamless operations similar to a normal trading day. HoSE emphasized that the first day of the new system will be March 4, with data for the first day of trading sourced from the end-of-day data on March 1.

The KRX system offers various new features, notably supporting individual investors in trading on a separate platform and facilitating day trading (T+0). The technology system project, signed between HoSE and KRX 2012 which includes the design, supply, installation, and transfer of the information technology system, is valued at VND600 billion (US$24.3 million). HoSE originally planned to complete this transition in 2021 but has since experienced delays. The most recent plan called for the new information technology system to be operational by the end of 2023, but the timeline has been pushed back.

The KRX system has garnered positive evaluations from many investors, securities companies, and analytical entities, with the expectation that it will become a new driving force for the market in the long run. The information about the test phases and the promised operation has significantly influenced the stock prices in the securities sector and led to a significant increase in the overall market.

In its early-year issuance report, KB Securities Vietnam (KBSV) estimated that the new system would increase the average daily trading value of the VN-Index by 30-70% compared to the recent 5-year average liquidity. KBSV believes that the operational launch of KRX will meet the remaining conditions for the market's upgrade according to FTSE Russell's ranking.

During the New Year's gong-striking ceremony at HoSE, Nguyen Thi Chan Phuong, Chairwoman of the State Securities Commission of Vietnam (SSC), emphasized that the official launch of KRX depends not only on the management agency or HoSE investors but also requires the collective efforts of market stakeholders, especially securities firms.

"Under the guidance of the Ministry of Finance and coordination from the SSC, the new information technology system will soon be put into operation," stated Phuong.

Nguyen Thi Viet Ha, Acting Vice Chairwoman of HoSE, confirmed the completion of the final user testing phase with KRX. HoSE will make efforts to deploy the system within this year.