3:26:35 PM | 7/8/2005
Through share auctions of several State-owned enterprises via the stock exchange, the Vietnam Association of Financial Investors (Vafi) has found that the stock exchange must add more regulations on auctions and publishing information to attract more investors, further promoting the effectiveness of auctioning shares on the stock exchange.
According to Vafi general secretary Nguyen Hoang Hai, share auction via the stock exchange has seen great success because it has attracted more and more investors with access to valuable information about enterprises through conferences addressing investment opportunities.
It is evident that new policies on equitization have had considerable effects on associations between equitization and capital market development and in attracting outside investors, especially strategic investors.
A representative of Vafi said he has had talks with Hanoi Securities Trading Centre and knows that the auction the Vinh Son-Song Hinh hydro power plant was conducted under auction regulations approved by State Securities Committee (SSC). However, the regulation does not stipulate that publishing information on the number of bids and investors is not allowed. Although Vafi has tried to explain this regulation, there is a big distance between administrators and investors.
In fact, several securities companies have not agreed with not publishing information on the number of investors and bids, which will not ensure a fair auction stipulated in decree No.187/2004/ND-CP and circular letter No.126/2004/TT-BTC. The staff of securities trading centres can have in their hands the exact number of investors, and offers and bids, which may cause negative activities such as selling information or giving information to their acquaintances.
Why does the SSC not report the number of auction participants and registered shares?
The reason is that publishing information will provide investors with the supply and demand and help them win bids with low offers, which causes losses for the state budget.
This regulation sounds unreasonable and obstructs market development according to Vafi.
In fact, the government aims to create fair and transparent auctions to protect the rights of investors. Not publishing this kind of information on the stock market is highly irrational.
Is not publishing this information aimed at maintaining security?
The auctions of Vinh Son-Song Hinh Hydro power plant, Postef and Khanh Hoa Power companies display that the number of investors had been disclosed and the securities trading centre didn’t know where this information came from and whether it would have to take responsibility for it or not.
Vafi members said that privilege of information would appear if this kind of information is not published. Not publishing this kind of information will also lead to false information, harming the interests of investors.
Moreover, the announcements of auctions have no English-written version, therefore, foreign investors cannot access enough information. Foreign investors will not be involved in the development of the equitization process. This will be a hindrance for investment promotion and for potential capital flows on the stock exchange.
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