| (Photo: daidoanket.vn)
Under the government’s plan 127 SOEs are supposed to be equitized between 2017 and 2020. But the equitisation progress in Vietnam has been too slow. By last year only 28 enterprises released initial public offerings. According to the Ministry of Finance, the main reason behind the slow process has been mainly attributed lackluster commitment to equitisation and divestment of ministries, sectors, localities, and economic groups. In addition, problems related to finance, land, and labor have also hindered the process.
Dang Quyet Tien, Director of the Corporate Finance Department of the Finance Ministry, said: “It is important to resolutely check and settle the issue relating to post-equitisation land use and hasten the work to accelerate the equitisation process. Secondly, it’s essential to bolster the listing on stock markets, and increase the inspection and oversight of those who deliberately delay the process.”
Tran Van Dung, Chairman of the State Securities Commission, said that the government has taken resolute measures to speed up SOE equitisation. “By the end of last year and early this year, the names of equitized SOEs which have not yet listed their shares on the stock exchange have been publicized. With the government’s resolute measures, there will be strong changes in the equitisation and listing from second quarter of this year,” said Dung.
Dominic Scriven, chairman of Dragon Capital, said: “We hope the equitisation process will be accelerated in the coming time. It’s fair to say that the value of enterprises in the stock market now is neither too low nor too high which is suitable for the state to continue divestment.”
The Ministry of Finance has released a circular to instruct SOEs to sell shares for the first time and the shares owned by the State by using the book-building method.
Book building is a process in which an underwriter determines the price to place on a securities offering based on the market demand of institutional investors.
The new method is expected to raise the number of successful auctions for SOEs, making the equitisation process faster and helping to fulfill the target set for 2020.