Analyses of listed companies and their shares are
becoming more widely available, meeting the growing demand of investors
for information about Viet Nam’s developing stock market, but a recent
controversy surrounding the inaccurate analysis of one blue-chip
company underscores the need for such analyses to be performed
accurately and reliably.


Securities firms worldwide analyse listed shares as a
reference for investors, generating reports that combine financial data
on a listed firm with commentary by securities analysts, including the
short-term outlook for the analysed share.


An analysis helps make listed firms more transparent
to investors as there is a more profound analysis of financial data
about the firms available, according to Le Hai Tra, a member of the HCM
City Stock Exchange’s management board.


As the market develops, demand has grown for greater
sources of information and reference, according to a recent dispatch
from the State Securities Commission, and it has become necessary to
develop the amount of analysis being generated from intermediary
financial institutions.


But such analyses only serve as a sound reference, if
securities firms establish a good relationship with listed firms, Tra
said, in reference to a recent report from the HCM City Securities Co
on Tan Tao Industrial Park Group (ITA), a blue-chip share listed on the
HCM City Stock Exchange.


ITA had asked the HCM City Securities Co to make a fix
in its report on the company, but the resulting data and analysis, ITA
complained on October 20, was inaccurate as the securities firm has not
made any contact with the group in writing the report.


The report had a negative impact on ITA’s reputation
and share prices, the group said, and caused confusion for ITA
shareholders and investors.


HCM City Securities confirmed it had spoken with ITA
before issuing the report and said that, in making its analysis, it
relied on quarterly financial reports and accounting data consistent
with the Securities Law.


"As the market surged, ITA’s price lost 55 per cent of
its value from its peak of VND169,000. At the time the report was
produced, ITA’s price was at VND64,000. It is impossible to say that
the analysis made ITA fall," said the brokerage in a letter issued on
October 22.


But, Tra noted, local analysts have seemed hesitant to
contact listed firms for information, relying instead on a firm’s
published prospectus and quarterly financial reports to make their
analysis of shares, reducing the quality of insight they can provide to
investors.


"In the US, securities analysts maintain a very close
relationship with listed firms they analyse," he added. "This results
in a professional report which provides investors with accurate
information.... If good co-operation is established between listed
companies and securities firms, there are no controversies like this
and the analysis is done more professionally."


Ho Quoc Tuan, a financial expert who has studied in
the UK, suggested that market regulators should build a legal framework
for analysis, aiming to develop it as a professional skill in the
securities business.