Vietnam exchange seeks boost for investors
HO CHI MINH CITY - Vietnam's fledgling stock exchange has asked the
government to press qualified privatised companies to
list to increase the number of stocks available to
investors.
Tran Dac Sinh, deputy director of the Securities Trading
Center, said market officials were pleased with the
exchange's performance since thrice-weekly, two-hour
trading began on July 28.
Popular demand for accounts continues to grow despite the ruling Communist
party's ambivalence towards the private sector.
"We have achieved what we desired," Mr Sinh said. "We have been successful in
generating the interest of the local people. In the past two months, the buyers
have outnumbered the sellers."
Officials are now considering whether they should alter trading to make it easier
for people from around the country to invest. Currently investors must be physically
present in one of six licensed brokerage offices in Ho Chi Minh City to buy or sell
shares. But Mr Sinh said market officials may modify the rules to allow investors to
place orders by fax, telephone, or the internet.
Despite the strong demand for shares, Mr Sinh said market officials were finding
it tough to convince other qualified companies to list, mostly because company
managers felt uncomfortable with the degree of transparency required.
"Some qualified companies don't want to reveal information about themselves,"
he said. "They are very much afraid of the competition."
So far, all four of the companies that are listed on the exchange are former
state-owned enterprises that have since "equitised" - Vietnam's delicate term for a
privatisation process that involves distributing the equity of a state company to
employees, management, the government and the public.
Out of the nearly 500 state companies that have been equitised since the process
began in 1993, about 70 meet the criteria for listing on the exchange, but just five
have applied for listing. Market officials want the exchange to have 20 listed
companies by the end of next year.
Tran Quyet Thang, general manager of Saigon Securities, said the government
should consider offering additional listing incentives, such as extending the
two-year tax breaks by an additional year.
"What the STC is missing is a long-term programme how to encourage more
companies to list," he said.
By Amy Kazmin - The Financial Times - October 12, 2000.
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