~ Le Viêt Nam, aujourd'hui. ~
The Vietnam News

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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.