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Vietnam considering forcing businesses to list
Foreign investors who attended the Vietnam Business Forum on June 1 on the threshold of the mid-year Consultative Group Meeting, though praising the timely actions taken by Vietnamese government agencies to deal with the economic downturn, said that the reform of the capital market needs to be accelerated.
Dominic Scriven, representative of the Capital Market Working Group, said that the equitisation process needs to be sped up and the government needs to ensure that equitised enterprises are appraised reasonably in comparison with other newly-emerging markets.
Mr Scriven expressed impatience regarding the stagnation of the equitisation process over the last one year, with many enterprises refusing to list their shares on the bourse though they were equitised a long time ago.
Deputy Minister of Finance Tran Xuan Ha said that the equitisation plan by 2010 has been approved by the government, and the list of enterprises to be equitised will be made public. However, Ha admitted that enterprises have been slow in making initial public offering (IPO) due to the difficulties of the market last year.
“The recovering market now provides a good opportunity for enterprises to offer stakes,” Ha said.
Chairman of the State Securities Commission (SSC) Vu Bang agreed that it is very important that big corporations be put on the bourse.
“We have reported this to the Ministry of Finance, and we are considering a certain mechanism which forces enterprises to list on the bourse in order to protect investors,” Bang said.
He added that many countries in the world also have regulations that force enterprises with big operation scale and high liquidity to list on the bourse.
Ha said that concerned agencies are considering amending Decree 109 enacted in 2007 on turning state-owned enterprises into joint-stock companies to make it fit the current circumstances of the country.
“It is expected that the draft decree will be submitted to the government by the end of the second quarter or early third quarter of 2009,” Ha said.
SCIC, what is it?
According to the Capital Market Working Group, the State Capital Investment Corporation (SCIC) is now playing multiple roles which could lead to conflicts of interest. For example, SCIC, which has the role of supporting the market, may not obtain the optimum interest when it acts as an investor. If SCIC makes investments, it needs to follow the regulation on information exposure like all other market members.
Ha said that the SCIC, established two years ago, now manages state capital in over 1,000 businesses.
Believing that the state holding 51 percent of stakes in equitised enterprises will cause difficulties in the operation of enterprises, invsestors have proposed that the government reduce the state’s ownership ratio to less than 50 percent when possible.
VietNamNet, DTCK
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