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Market collapse leaves equitization plan in tatters
The government has completed less than a third of this year’s planned share sales after the market rout cut the benchmark index by 67 percent.
The government sold shares in 73 companies in the first 11 months, compared with a full-year target of 262, the Ministry of Finance said in a document posted on its website. The so-called “equitization” program is behind schedule because of “many difficulties” in the economy and “volatility” in the stock market, the statement said.
Stocks have plunged on the Ho Chi Minh Stock Exchange this year, making the VN-Index Asia’s worst performer, as the worldwide rout worsened the effect of slowing economic growth. Vietnam’s exports, tourism and services are suffering because of the global turmoil, Prime Minister Nguyen Tan Dung said on November 27.
“In the current economic and financial context, companies have found no driver to sell shares,” said Le Dang Doanh, a senior research fellow at Vietnam’s Institute of Development Studies in Hanoi and a former senior economist at the Ministry of Planning and Investment.
Vietnam has slashed its economic growth target for this year to 6.7 percent from an earlier goal of as much as 9 percent.
The central bank this week cut its benchmark interest rate for the fourth time in six weeks, to 10 percent from 11 percent, to reduce borrowing costs and spur lending.
The government will have to sell shares in 948 companies from now until the year 2010, Thoi Bao Kinh Te Viet Nam newspaper reported Thursday.
Bloomberg
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