It’s time to make IPO abroad: SSC

Tuesday, May 20, 2008
Nguyen Ngoc Canh, Head of the International Cooperation Division under the State Securities Commission (SSC), said that it is now the right time for Vietnamese companies to make IPOs and list on foreign bourses, when the domestic stock market is lackluster, investors escape from trading floors and commodities remain unsalable.

Do you think that making IPOs abroad is the right choice for Vietnamese companies now?

Listing companies are facing big difficulties now, while state owned enterprises, though having been operating well, still find it difficult to successfully to make IPOs at this moment.

The situation is familiar to the regional markets, including China. As the stock index has dropped from 6,000 to 3,400 points, China saw only two out of 52 companies successfully making IPOs.

Therefore, I think that it’s reasonable for state owned enterprises to make IPOs abroad to mobilize capital.

Could you please elaborate on this?

By successfully issuing securities and successfully mobilizing capital on foreign stock markets, companies will restore confidence from domestic investors, attracting them back to the market.

By listing on foreign bourses, companies will be able not only to mobilize capital for their business and production, but also to heighten their images and position on the international market.

Which procedures must Vietnamese enterprises follow to list on foreign bourses?

First of all, enterprises need to fully understand the Securities Laws and Enterprise Laws. As for equitised companies, the plans to list on foreign bourses needs the approval at the shareholders’ meeting, while state owned enterprises need the approval of the organism in charge.

Second, every enterprise should consider thoroughly when choosing suitable bourses to list on. Every stock exchange sets its own conditions and offers different advantages.

Could you please give suggestions about which bourses should be listed on?

As I said before, different markets would require different conditions for listing. Enterprises should learn about every market in order to find the most suitable ones for them.

Hong Kong, a long standing market, which gathers many big investment funds of the world, proves to be the good choice for enterprises, which want to access foreign capital sources with low cost.

Besides, Singapore has also emerged as financial centre of the region, which I think can also be the place for Vietnamese companies to mobilize capital and list their shares.

High-tech companies can think of more distant markets like the US’s Nasdaq.

I think that in the immediate time, we should let some competent companies which can meet the requirements for listing set by foreign bourses do so. Other companies will learn the lessons from the predecessors. (Dan Tri)