Vietnamese enterprises hoping to list on a foreign stock exchange are stumbling on strict requirements for information disclosure, international accounting and audit standards, and corporate governance, said the director of the State Securities Commission's international co-operation department, Nguyen Ngoc Canh.
Because foreign listings can improve an enterprise's capacity to raise capital, promote its trade name, and expand export markets, many domestic companies have expressed an intention to list shares on a foreign bourse, Canh said, but so far none have succeeded.
Dairy giant Vinamilk was the first Vietnamese company to receive approval to list on a foreign stock exchange, back in 2008. However, well over a year later, the plan to list Vinamilk shares on the Singapore Exchange has not yet been carried out.
Saigon Securities Inc, commercial bakery Kinh Do and software giant FPT have also all announced plans to list on foreign stock exchanges. Recently, the Mirae Comapny, listed on the HCM City Stock Exchange under the code KRM, joined the club, with a plan to list on the Korea Stock Exchange (Kosdaq).
Domestic legal requirements have also created an obstacle to listing firms overseas, with foreign holdings in domestic enterprises, whether listed domestically or overseas, capped at 49 per cent.
While foreign holdings in companies listed on the HCM City Stock Exchange currently averaged 21 percent, Canh said, foreign ownership in a number of blue-chip companies, including Sacombank (STB), Refrigeration & Electrical Engineering (REE), Cables and Telecommunications Materials (SAM), Gemandept (GMD) and Vinamilk (VNM) have nearly reached the limit.
The State Securities Commission hasa (Igned memoranda of understanding with a number of foreign stock exchanges to facilitate domestic companies in listing overseas, Canh said, and the commission was in the process of completing a draft circular guiding listings on foreign bourses.
Many companies continue to expect to access foreign capital markets to restructure their firms and boost their anh stated. "Nevertheless, enterprises need to identify their primary aim, whether its corporate financial restructuring, export market expansion, or brand name promotion, to select a suitable foreign bourse," he said.