|
Firms eye new way to attract capital
Depository receipts could become helpful tools for many Vietnamese enterprises that want to attract foreign capital to help expand their business operations.
Depository receipts (DRs) are financial instruments that represent an ownership interest in the securities of a foreign issuer typically trading outside its home market, and they have become a primary channel for raising capital worldwide, according to Citibank.
Domestic enterprises might access foreign capital by issuing DRs, but they must be able to demonstrate attractive industry dynamics, visible revenue trends, strong growth drivers, and a strong financial position, said Citibank's Viet Nam Managing Director Brett Krause.
"The prospect for DRs is quite strong given the level of offshore interest in Vietnamese companies, but the most important hurdle is around the need for clear regulations," Krause said. "Transparency is critical."
Compliance with disclosure requirements remained a major challenge for Vietnamese companies, he noted.
DRs could also help bridge technical differences between stock markets, allowing local companies to attract international capital as well as help investors easily diversify their portfolios with foreign securities, commented HCM City Securities Company Managing Director Johan Kruimer.
HCM City-listed real estate developer Hoang Anh Gia Lai Company (HAG) is the first Vietnamese company to have stated an intent to issue DRs and list them on the London Stock Exchange. To that end, it recently issued 16.2 million shares to strategic partner Deutsche Bank Trust Company Americas.
The foreign partner was conducting necessary procedures under overseas regulations, said HAG Deputy Director Vo Truong Son.
vietnamnews
|
