VietNamNet Bridge – The number of Vietnamese unlisted public companies (UPCoM) doubled last year, and 2016 regulations should bolster once-sluggish growth even more.

Habeco’s production line at the Ha Noi Beer Factory in Me Linh District. Habeco is expected to be listed as a UPCoM this year. – Photo: VNS

Nguyen Vu Quang Trung, vice director of the Ha Noi Stock Exchange (HNX), said that UPCoM - said to be a buffer for public companies before their official listing in the two local bourses - currently holds less than 30 per cent of the total 1,071 unlisted public companies.

According to local media, non-UPCoM shares have no trading value on the legal market, or are traded illegally. Trading on the unlisted market is better regulated than illegal trading on the black market.               

Since 2015, 72 more firms joined the UPCoM, which trades stocks, convertible bonds of unlisted public companies, and stocks of companies delisted from listed markets. UPCoM aims to have 300 more companies join by the end of the year. The vice director said decision No 51/2015/QĐ-TTg and decree No 60/2015/NĐ-CP made the recent growth possible. Both directives forced all public companies to list their stocks in UPCoM, before listing in local bourses.

Under Vietnamese securities law, public companies are defined as: those with IPOs; those with shares listed in the two bourses; those whose stakes are owned by more than 100 investors, with charter capital of VND10 billion (US$447,000) or more; and State-owned enterprises (SOEs) that were turned into joint stock companies. So the State’s plan to divest VND40 trillion from SOEs this year via auctions will bring many more stocks to the unlisted market. And as privatisation of State-owned companies continues, more and more of them will be added to the unlisted market.

Current Vietnamese laws stipulate that SOEs that shift to public companies must register in the UPCoM within 90 days.

Under the Government’s plan, 470 SOEs will become privatised between 2016 and 2017, including 130 SOEs that started the privatisation process last year. As a result, there should be about 150 new companies listed in UPCoM within the year.  This includes big name companies, such as MobiFone, Satra, Benthanh Group, Viet Nam Tea.

The regulations will also bring banks and public companies completing their IPOs to UPCoM, including  Seaprodex, Vinatex, Ha Noi Construction Corporation, Sabeco, Habeco, and Cholimex Food.

Starting in 2017, HNX will rate the transparency of companies traded on the market and identify good quality stocks publicly, to make investors’ work easier. As of yesterday, UPCoM had 268 companies trading, with nearly 5.9 billion shares with a market value of VND75 trillion.

VNS