In an attempt to feed the hungry Vietnamese stock market, the Ministry of Finance (MoF) last week submitted a list of around 300 equitised enterprises for government approval to put them on the local bourse.
The move is to realise the Prime Minister Phan Van Khai’s 04/2005 Instruction issued early last month which set a target of 200 listed companies for the local stock market this year.
The list is divided into three groups, with the first comprising equitised enterprises (formerly State-owned enterprises, or SOEs) that satisfy conditions for listing on the board of the Ho Chi Minh City Securities Trading Centre (HSTC) or registering for transaction at the Ha Noi Securities Trading Centre (HNSTC).
The second group covers SOEs-turned joint-stock companies with the State holding more than 51 per cent. They will reduce the State’s stake by selling its shares via the stock market in order to get on the board.
In the third group are SoEs that will undergo equitisation this year and meet requirements for initial public offerings (IPO) via the stock market, thus becoming listed companies.
Based on the three-part list, the Ministry of Finance will send its mission to work with related ministries, localities and businesses, guiding them to achieve the objectives.
Vietnam Investment Review has learnt that the State Securities Commission (SSC) has just set up a team of 12 members to assist more firms to list or register for transactions with the HSTC and HNSTC. The team will be led by SSC’s vice chairman Vu Bang.
Although nearly 2,400 companies and affiliates have been equitised with a total registered capital of over $1.5 billion, only 28 joint stock companies have been put on the local securities market so far.
More new listings are urged to be pumped into Vietnam’s hungry stock market to diversify menu for foreign investors, who are now being forced to stand out of the fray as many of the existing listed firms leave no more room for them.
A recent survey by the SSC pointed out that only 12 out of 447 surveyed businesses say they plan to be listed on the country’s stock market this year.
They are among the 217 companies that have revealed their desire for a bourse listing by the year 2015. Of that figure, 34 want to list next year, 97 in 2007, 19 in 2008 and one the following year.
An additional 21 companies don’t expect to join the market until 2010 and one company will wait until 2015. The remaining enterprises have not yet set a specific time for their listing.
The surveyed businesses include 170 formerly State-owned equitised companies, 62 State-owned enterprises under equitisation and 214 companies that were set up as joint stock firms.
Many of those that took part in the survey are aware of the listing advantages, including improved business image and prestige (75 per cent awareness), increased competitive advantage (73.6 per cent), a more dynamic executive board (70.4 per cent) and higher share liquidity (65.3 per cent).
But more than 60 per cent are concerned about company executives who lack sufficient knowledge of securities and the stock market.
Over 48 per cent are worried about complicated listing procedures, while 38 per cent are concerned about making their information public.