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Apr 04, 2018 / 17:04

Finance ministry takes bold actions to push firms listing

The Ministry of Finance will enhance the supervision and fine state-owned enterprises (SOEs) that were equitised but not listed in the stock markets, deputy finance minister Vu Thi Mai said.

One year ago, the government publicized the list of 578 SOEs that were equitised but not listed, however, there are still half of the firms haven’t listed, Mai announced at the government’s regular meeting recently.
 
Some 723 stocks and fund certificates are listed in Vietnam’s stock exchanges
Some 723 stocks and fund certificates are listed in Vietnam’s stock exchanges
Deputy Prime Minister Vuong Dinh Hue last year ordered all ministries, localities and State-owned corporations to ask representatives of the concerned SOEs to list their shares on the market as soon as they meet all the requirements to do so.
He noted that in accordance with Directive 04/CT-TTg issued by the Prime Minister on the restructuring and renovation of SOEs in the period 2016-2020, the SOEs had to list their shares on the stock exchanges within a year after their IPOs.
Analysts say that the delay in listing equitised SOEs will have negative impacts within the companies and also make further equitisation less attractive to investors, especially foreign investors, resulting in a loss of income to the State.
Delayed listing of SOEs will also reduce the chance of holding successful IPOs, because the number of investors participating in the auctions will be low, leading to low bidding prices.
The delayed listing will also result in SOEs being unable to transparently show their financial status, and investors will not be keen on investing in firms that whose operations they cannot monitor.
At the meeting, Mai also said that the stock market is on upward trend, helping VN-Index on the Ho Chi Minh Stock Exchange to rise by some 19 percent against the previous month to hit 1,196.61 points on April 2, a new all-time high.
The capitalization of the Ho Chi Minh and Hanoi stock exchanges, exclusive bonds, reached some 82.2 percent of the country’s GDP, Mai said, adding that 723 stocks and fund certificates are listed in the two exchanges.
To further develop the stock market, Mai said that the finance ministry has submitted to the government a revised draft Law on Securities, which is expected to create favorable conditions for the market’s sustained development.
Vietnam considers 2018 a key year in the country’s restructuring plan of SOEs, targeting to equitise at least 86 SOEs in the year with 64 of which being large size.
The target is tough, but experts believed it is feasible thanks to many favorable conditions including high economic growth and macroeconomic stability. 
According to Dang Quyet Tien, director general of the Ministry of Finance’s Department of Corporate Finance, the number of SOEs earmarked for equitisation and divestment in 2018 account for over 50 and 46 per cent of the total number planned for 2017-2020.
Deputy Prime Minister Vuong Dinh Hue also told the media that Vietnam is dramatically accelerating sales of stakes in SOEs, announcing this year’s plan to sell 6.5 times more shares than it offered last year.
The plan is aimed to boost revenue and ease a strained budget, while seeking to exceed its economic growth target this year. The state raised VND135.6 trillion (US$6 billion) from these sales in 2017.
“We need more foreign investment but also want to lure good investors who can help our companies improve corporate governance,” Hue said. The assets the government plans to sell “will include leading companies in energy, power and petroleum,” he said.