Two years ago, many listed companies revealed their intentions to list on regional stock exchanges. Due to many reasons, their foreign listings have remained only intentions. Therefore, the official listing of Cavico Corp on the NASDAQ Capital Market (USA) is a major event.
First company
After qualifying strict requirements, Cavico Corp., a leading infrastructure development company based in Vietnam, was officially approved for listing on the NASDAQ Capital Market under the ticker symbol of CAVO on September 18, 2009. This is a major event on the Vietnamese stock market because the NASDAQ Capital Market is the largest US equities exchange, with approximately 3,200 member-companies. NASDAQ-listed companies are leaders across all areas of business including industrials, technology, retail, communications, financial services, transportation, media, and biotechnology. Many world-leading names are listed on NASDAQ, including Intel, Microsoft and Dell. So far, Cavico Vietnam Corp is the first Vietnamese company to list on a foreign stock exchange although many have announced their plans.
Following Cavivo Corp, PetroVietnam Finance Joint Stock Corporation (PVFC) will list its shares on a foreign bourse. Mr Tong Quoc Truong, General Director of PVFC, said: “PVFC is completing the procedures like internationalised financial statement report, legal consulting and procedure consulting for listing on the Singapore Stock Exchange. The corporation expects to list on the Singaporean bourse in the second quarter of 2010. Thus, if the listing is as planned, PVFC will be the first credit institution in Vietnam to list shares overseas.
There are three main objectives for PVFC to list in Singapore: internationalising PVF trademark, selling PetroVietnam’s equity (PetroVietnam is now holding 78 per cent of PVF’s equity), and expanding Asian presence where Singapore is a stepping stone, according to Mr Truong.
Procedural difficulty
Arguably, the hardest difficulty in listing shares on a foreign stock exchange is to meet listing requirements of targeted exchanges. Mr Bui Quang Ha, President and Chief Executive Officer of Cavico Corp, said: To list shares on NASDAQ, Cavico Corp has completed a hard journey. Rodman & Renshaw LLC, a full service investment bank dedicated to providing corporate finance, strategic advisory and related services to companies, acted as the investment advisor to Cavico Corp. in connection with its listing on the NASDAQ Capital Market. Sichenzia Ross Friedman Ference LLP, a leading securities law firm specializing in small and mid-cap public companies, represented Cavico Corp. in connection with its listing on the NASDAQ Capital Market.
With the supports from these two companies, Cavico has met all strict requirements to be listed on the NASDAQ Stock Quotes. Previously, Cavico listed its common stock on the OTC Bulletin Board (OTCBB) with the ticker symbol of CVIC. After actively working with NASDAQ, on June 11, 2009, Cavico officially submitted its listing application to NASDAQ.
Mr Truong said although his company was consulted and supported by a US financial institution, Morgan Stanley, to list shares in Singapore, the listing requirements are difficult to meet. “The procedure is so much that we cannot measure how long we have from now till the listing because there are a number of requirements to be fulfilled in each step,” he said.
According to a stock specialist, the procedure is not the highest obstacle on the road to list shares in foreign stock exchanges because any country has many exchanges, with a wide range of options for companies. However, the most important matter is now the listing price in the home exchange and foreign exchange. If there is a difference unable to be addressed, it will lead to immeasurable consequences. “According to the current regulations on foreign exchange, domestic investors are not allowed to open accounts to purchase foreign securities but foreign investors can open accounts to trade securities in Vietnam. Thus, if the share price is lower in the foreign market than in the domestic market, foreign investors can absolutely sell the equity in Vietnam to purchase the foreign equity and vice versa. In the meantime, domestic investors cannot do that. As a result, domestic investors are at a disadvantage,” the specialist explained.
Foreign listings to attract capital from foreign investors, boost financial transparency and internationalise trademarks are the targets for companies. However, strict requirements and other difficulties have prevented many companies from realising their overseas listing plans.
T.N
Vietnamese
