Overseas IPO to Be Best Capital Mobilization Channel: SSC Chairman

Initial public offerings and listing in foreign markets will be an important channel for Vietnamese enterprises to mobilize capital amid the local stock market slump, Vietnam State Securities Commission (SSC)’s Chairman Vu Bang said.

 

Although local enterprises will meet difficulties in raising fund due to investors’ lower demand and share prices in the context of the global financial crisis, Bang admitted, listing overseas will help promote positions and expand import-export markets for local enterprises.

 

Securities issuances and listing abroad will also promote transparency and capacity of corporate management, and help local firms access international accounting standards.

 

However, Bang said no Vietnamese enterprises have been listed in foreign markets so far due to different accounting standards.

 

The official statistics showed that local companies raised VND130 trillion (US$7.9 billion) via the stock market in 2007. However, they raised only VND19.6 trillion in the first nine months of 2008.

 

At a seminar to promote the international listings of Vietnamese enterprises, Deputy Prime Minister Pham Gia Khiem said “The government of Vietnam will create good conditions for locals to list overseas to diversify their sources of capital,”

 

Bang noted legal framework is in the process of completion to promote this task.

 

Currently, the stock market of Vietnam has 317 listed firms, with the total market capitalization of VND234.7 trillion, or 20.5 per cent of the country’s GDP. (Vietnam Economic Times)