Obstacles

Fortress Vietnam (FTV) and Seoul Metal Vietnam (SMVC) are two of the FIEs which wish to list their shares at the stock exchanges in Vietnam.

FTV spent much time on the preparatory work for the listing. It changed the company’s mode into public company in 2016 and then put its shares into transactions at OTC as a buffer step before shifting to list shares on the official bourses.

Timothy Hsu from FTV said in 2017, when the company’s leadership decided to list shares at the HCM City Stock Exchange (HOSE), it understood that the regulations applied to FIEs remained unclear. However, it could not imagine that it would take so much time to ask for licenses from appropriate agencies.

Appropriate agencies want to set up a comprehensive legal framework for the listing of FIEs to alleviate the concern that these companies may report losses and withdraw capital after listing.

Appropriate agencies want to set up a comprehensive legal framework for the listing of FIEs to alleviate the concern that these companies may report losses and withdraw capital after listing.

However, it will take time do set up such a framework, because ministries and agencies will need to discuss the policies and regulations related to various issues.

As for SMVC, after listing shares on OTC, the company also wants to move to HOSE to improve the liquidity of the shares and attract more institutional investors. But like FTV, the company is meeting many obstacles.

Relevant ministries and agencies told the company that there is no document that guides the listing and registration for securities transactions applied to FIEs, though the current laws do not prohibit the listing and transaction of FIEs’ shares.

Listing FIEs

Thanks to a pilot mechanism that allowed FIEs to list shares on stock exchanges, 10 years ago, some FIEs including Everpia (EVE), Mirae (KMR), Taya Vietnam (TYA) and Tung Kuang Industry (TKU) successfully listed their shares on the bourse, which helped them seek capital and scale up business.

However, the transactions of the shares at this moment are not really good and the value of the shares is low.

Kang Moon Kyung, CEO of Mirae Asset Vietnam, cited Bloomberg’s figures as reported that by Q3 2019, the net revenue of FIEs listing shares on HOSE and the Hanoi Stock Exchange (HNX) had been positive, but the revenue increase was smaller than zero (minus 5 percent and minus 3.5 percent, respectively, in the last 12 months). Most companies are facing minus growth rates in post-tax profit.

According to Nguyen Hong Khanh from VISecurities, the business performance of many FIEs is unstable and unpredictable, and there has been no breakthrough in year-on-year profits. This has disappointed investors, and the share prices have been decreasing.

Thanh Lich 

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