What is stock listing? This is an important step to help businesses trade publicly on the stock exchange, raise capital and enhance brand reputation in the market.
What is Stock Listing? Benefits and Regulations Businesses Need to Know
What is stock listing? This is the process by which a company makes its shares or bonds publicly available for trading on a stock exchange. This allows the company to reach a large pool of investors and also allows the company's shares to be traded on the secondary market.
Listing securities brings transparency and increases the reputation of the business. After being listed, companies must comply with strict regulations of the exchange, from information disclosure to ensuring the rights of shareholders.
What is listing on the stock exchange?
What is listing on the stock exchange? This is the process by which a company lists its shares or bonds on an exchange so that they can be bought and sold publicly. This process not only helps businesses raise capital easily but also expands their investor network, creating the premise for sustainable development.
Listing also helps businesses enhance their reputation thanks to transparency and responsibility in governance. Listed companies must comply with strict regulations on finance, information disclosure and shareholder protection. This creates greater confidence from the market, contributing to increasing brand value and competitiveness.
Securities Listing Conditions
To better understand the process What is stock listing?, let's find out more securities listing conditions that a company needs to meet. The conditions usually include:
- Charter capital: The company must have fully contributed charter capital according to the minimum regulations of each exchange. For example, HOSE requires charter capital of 120 billion VND or more.
- Business results: The company must have positive profits for several consecutive years before listing.
- Shareholder structure: There must be a certain number of shareholders (usually at least 300 small shareholders) to ensure liquidity of the shares.
- Financial transparency: Companies need to audit financial statements and disclose financial information clearly and transparently.
These conditions are intended to ensure that the listed company All have good financial capacity and management ability.
Benefits of Listing Securities
Listing on a stock exchange brings many important benefits to both businesses and investors:
- Capital raising: Listed companies can issue additional shares or bonds to raise capital, support expansion, invest in product research and development, or improve infrastructure.
- Increase liquidity: Shares are publicly traded on the stock exchange, making it easy for investors to buy and sell, especially for safe investment fund, which always requires high liquidity to maintain flexible operations. This helps reduce risks when investors need to transfer assets.
- Enhance reputation: Listing proves that the company meets financial and management requirements. This not only enhances the company's reputation but also creates trust with partners, customers and investors.
- Expanding relationships: Listed companies can attract institutional investors and strategic partners, opening up opportunities for cooperation, development and sustainable growth in the long term.
Companies Listed on Hose Stock Exchange
HOSE is one of the largest and most important stock exchanges in Vietnam, home to many companies listed on the HOSE. These companies come from many different industries, from finance, real estate, manufacturing to technology, creating a diverse and rich investment environment.
Some typical companies listed on HOSE include:
- Vingroup Joint Stock Company (VIC): A famous multi-industry corporation, with major projects in real estate, retail and technology.
- Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB): One of the largest and most prestigious banks in Vietnam, operating mainly in the financial sector.
- Hoa Phat Joint Stock Company (HPG): Leading group in steel manufacturing industry in Vietnam.
Listing on Hose not only helps these companies raise large capital to expand their scale and operations, but also helps increase financial transparency, attracting the attention of domestic and foreign investors. This contributes to strengthening the position of Companies listed on the HOSE stock exchange and promote sustainable development.
Delisting of Securities: Causes and Impact on Investors
What is delisting of securities? Delisting is the process by which a company's shares are suspended from trading on a stock exchange, resulting in them no longer being allowed to be bought and sold on an official stock exchange. Reasons for delisting may include:
- Failure to meet listing maintenance requirements: The company does not maintain sufficient criteria such as charter capital, profit, or shareholder structure as required by the exchange.
- The company voluntarily withdrew from the stock exchange.: Due to the company wanting to restructure or change its business strategy, it may lead to self-delisting.
- Violation of exchange regulations: The company fails to comply with stock exchange regulations, such as failing to disclose financial information on time or violating other regulations.
Delisting can cause huge losses for investors, as they are no longer able to sell their shares. At the same time, the company can also suffer damage to its reputation and credibility, affecting its ability to raise capital and its relationships with partners.
Risks of Listing Securities
Although listing securities brings many opportunities and benefits to businesses, there is also no shortage of risks that companies need to face:
- High cost: Listing securities requires businesses to incur large costs, including consulting fees, stock issuance costs, and costs of complying with stock exchange regulations. After listing, companies must continue to pay costs related to periodic financial reporting, auditing, and maintaining relationships with regulatory agencies.
- Shareholder and public pressure: After listing, a company will face constant scrutiny from shareholders, investors and the public. The company's shares will be publicly traded, which makes all of the company's operations and business decisions transparent and can affect the value of the stock. Shareholders' expectations can create great pressure, especially when the company fails to meet profit expectations.
- Market risk: A company's stock price can be strongly affected by market fluctuations, such as changes in the macro economy, government policies, or industry competition. These fluctuations can cause the stock value to change rapidly, reducing the company's market value and creating risks for both the business and its shareholders.
These risks can negatively impact a company's business and finances if not properly managed.
Conclude
What is stock listing? This is an important step to help businesses access the capital market and affirm their position in the financial market. However, listing also requires careful preparation and strict compliance with regulations. Hopefully through this article HVA Group can help investors better understand the listing process and conditions, along with the benefits and risks involved, thereby making informed financial decisions, thereby maximizing opportunities in the stock market.
