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Lack Of Int’l Savvy Hindering The Listing Of Vietnam Firms In US

A lack of expertise is keeping Vietnamese enterprises off the US stock market, which is home to some of the strictest requirements in the world, according to industry experts.

Nguyen Khac Hien, chairman and general director of Providential Holdings, said he could count the number of Vietnamese firms planning to list on the US market on his hand.

He said that most local firms don’t feel they have the ability to list on such a significant exchange.

Vietnam’s leading dairy marker, Vinamilk Corporation – which is listed on Vietnam’s main board in Ho Chi Minh City – said legal barriers including the US Securities Law, Tax Law and a series of standard documents made the group hesitant to list in the US.

Fank Fahman, a founding member of investor relations service Hawk Associates Inc., said Vietnamese firms were reluctant to access the US market because they had no knowledge of it.

He added the local firms’ knew very little about international law while the US exchange set some of the strictest legal and performance requirements in the world.

Vietnamese auditing standards are also not on par with the US.

Poor marketing, investor relations

Investor relations (IR) plans – the marketing of financial capacity to create credit for investors – often play a key role in listing on major markets like the US, however, IR in Vietnam is weak and unorganized.

A recent survey of Rivel Research Group, a marketing research firm focusing exclusively on the global investment company, said IR plans played a decisive role of fluctuation of a firm’s share, accounting for 25 percent.

Good IR performance could push shares up by 10 percent while poor IR often pulls shares down by 15 percent, according to the group.

Dao Nam Anh, director of Vietnam Finance Communication Company, said local firms rarely turn publicity that focuses on promoting a company’s business strategy, revenue, expected revenue and financial reports.

Meanwhile foreign investors needed such information to base their investment decisions on.

Nguyen Hoang Anh, a lawyer from Johnson Stokes & Master Vietnam, said local firms’ financial information systems do not meet international standards.

But improving upon such problems in order to list in the US, the proud home of 250 investment funds capitalized US$50 billion each, could do big things for Vietnamese companies.

In May last year infrastructure developer Cavico Corporation became the first Vietnam-based firm to trade on the US over-the-counter market (OTC), which is known as Pink Sheets.

Providential Holdings, which specializes in mergers and acquisitions consulting services and invests in selective businesses, had advised Cavico to debut on Pink Sheet as a preparatory step to list on senior US exchanges.

Other markets

The London Stock Exchange, one of the world’s largest, has eyed Vietnamese listings and one of its top officials promised support at a June meeting with officials from the State Securities Commission (SSC) and HCMC exchange.

Martin Graham, Director of Markets of LSE, said that the LSE would be a good place for high-performance Vietnamese companies to locate quality international financial sources.

Vietnamese companies knew little about the LSE because of the exchange’s meager marketing efforts but he said listing there could put Vietnamese firms on a par with global corporations.

Additionally, several London-listed fund managers have showed interest in Asia, including Vietnam.

Singapore Exchange (SGX) also hopes to attract more Vietnamese listings, as it aims to become a larger regional stock market.

Investors say that Singapore has been more aggressively wooing Vietnam than Hong Kong.

Many Vietnamese companies are expected to list abroad by 2008-09 to tap the international capital market with a particular interest in Singapore market.

Beating others to a Singapore listing will be leading dairy producer, Vinamilk, which is expected to start trading on the market, possibly early next year.

Tech giant FPT will likely follow suit shortly thereafter.

Confectioner Kinh Do Corp., Trung Nguyen coffee, and some 50 other companies have asked about procedures for foreign listing, according to the SSC.

Source: NLD

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