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Strong shareholder relations crucial
Listed enterprises need to improve their shareholder relations if they want to boost investor confidence and see their shares perform better on the stock market.
Shareholder relations encompass all sorts of public information, from financial reports, to prospectuses to annual reports, all of which provide shareholders with essential information for judging the soundness of their investments.
In Vietnam, however, shareholder relations remain in their infancy, with view publicly traded companies even maintaining websites to keep shareholders informed about business activity and performance. Not even quarterly financial statements, which the law requires these companies to repair, are posted on line by many companies.
Hoang Trung Nghia, an investor in Hanoi, said, "I have attended some stockholder meetings and realised that very few enterprises prepare detailed reports on their businesses for stockholders."
Nghia affirmed he has rarely located information on the websites of enterprises in which he is a shareholder.
The few listed companies that have web pages for investor relations are rarely updated, another display of seeming disregard for investors.
Hoa Binh Securities broker Nguyen Thanh Cong said that, in other stock markets worldwide, listed companies paid a great deal of attention to information for shareholders because it helped prove the effectiveness of enterprises in using investor capital.
"Domestic firms don't seem to realise how important investor relations are. Their information for stockholders is weak," Cong said.
Stock market traders now seem to depend on several information research services and consulting and analysis departments of securities firms. Disturbingly, many investors still overly rely on market rumours and word-of-mouth before deciding whether to invest in a particular share.
Bao Viet Securities deputy director Ngo Phuong Chi said that consulting services of securities firms tended to target their information to institutional investors, not intending it to be relied upon en masse by individual investors.
"This causes herd mentality among local traders," Cong said.
A few enterprises, like Refrigeration, Engineering and Electrical Corporation (REE), have begun holding conferences for stockholders to update them on business activities.
Sacombank also maintains an updated website full of the latest news on its business.
"These are an initial effort by listed companies to promote "the relationship between enterprises and their shareholders," Cong said.
"The domestic exchange is still young and volatile, so these efforts are necessary to direct investors to the right investments."
He called on all listed firms to improve their shareholder relations, hiring professional consultants if needed to help them compile and publish the information.
VNS
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