Investors, listed companies need to cooperate more closely

Investors need accurate information

A seminar attended by listed companies and investors was held in Hanoi on December 16 with the participation of 40 listed companies in Hanoi and HCM City and around 1,000 securities investors. This provided a chance for them to discuss and learn about the demands and interests of both sides.

In recent times, many websites, bulletins and books about the securities market have been published but none have been able to provide the necessary information sought after by investors.

 

Securities investor Pham Van Hong said, “We ourselves can analyse the rise and fall of share prices but what we really need is accurate and objective financial reports, which should be released on schedule by listing companies.”

Two other investors, Do Ngoc Vinh and Duong Anh Minh from the Hanoi Securities Trading Centre (HaSTC) said that the products listed on the Vietnamese securities market are not diverse enough and lack on the secondary market shares while the listed shares do not appeal to investors. In addition, listing companies do not provide enough information for investors, making it difficult for them to know about the increased capital of listed companies.

Nguyen Bang Tam, President of the Management Board of the Binh Thanh Import-Export Production and Trade Joint Stock Company said that investors should act as shareholders in giving their opinions on issues which listed companies have not done well such as management of human resources, financial potential risks and future projects.

However, most investors have no opportunity to give their opinion on these issues. Investor Dang Thanh Ha also complained about the difference between companies’ financial reports and the real value of shares.

 

More transparent information

The association of listed organisations has officially made its debut. This is a good place for listed companies on Vietnam’s stock exchange to share their experiences in investment management, improve their business administration capacity, and expand the scale of their operations in both the local and overseas markets.

Chairman of the Association of Listing companies Do Van Trac said to develop a  sustainable stock market, listed companies should conduct their business activities transparently and regularly update investors with the latest information.  Mr Trac said the information provided by listed companies is now relatively “transparent”.

Mr Trac added that apart from announcing information at the request of businesses and the State Securities Committee, the association will use consultants to hold forums so that investors can understand the reports of each enterprise. Currently, only experienced investors can understand and analyse reports from enterprises. The association will also help subsidiary companies to write reports so that listed companies can provide investors with the best information. In the near future, even ordinary investors will be able to understand the information provided by listed companies.

Mr Tam, who is also deputy chairman of the Association of Listed Organizations, said that listed companies are responsible for announcing information about management work, development strategies and projects so that investors can place their capital in the right place.

 

Prospects for Vietnamese stock market in 2008

Under the Government’s direction, the Vietnamese stock market will develop on par with other stock markets in the region by 2020. To achieve this goal, it is essential to boost the development of the local capital market and mobilize investment capital from all economic sectors. The capitalization of the stock market is expected to account for 50 percent and 70 percent of the nation’s GDP by 2010 and 2020, respectively.

According to Mr Tam, the development of the domestic stock market in recent times has consolidated investors’ trust in the success of the Government’s get targets. He said: “The Vietnamese stock market has been operating for six years, but its total investment in the market has only contributed between 40-50 percent of the economy’s GDP. Despite the ups and downs in the market, in 2007 listed companies gained more achievements in their business operations than in the previous year. There is no reason for a fall in the stock market if listed companies are developing well. We do not see any indications that the Vietnamese stock market is dropping.”

According to Mr Trac, to secure stronger development in 2008, the State should promote initial public offerings of share (IPO) and boost the equitization of State-owned companies, such as oil and gas, electricity and banking.

He said that at present it is not necessary to expand the stock market and list on other international securities trading centres, such as in Singapore, New York and London. When the domestic market is operating well with low prices, it is not necessary to mobilize capital from overseas.