Many investors think that it would be unwise for Vietnamese companies to list shares on foreign bourses, as they have more favourable conditions in the domestic market, especially as the market is hot. In fact, saying they will list on international stock markets is just a ploy that companies are using to increase the values of their companies.

However, experts do not share the same view. They have pointed out that the listing of Vietnamese companies on foreign stock markets should be seen as necessary work, especially as Vietnam is trying to penetrate more deeply into the world.

Here are the opinions of experts, officials and company leaders.

Nguyen Ngoc Thanh, Managing Director of VNDirect – VNDS: Listing on foreign bourses is not difficult work if companies are determined to do this.

SGX has experienced a long development and has become a centre which connects regional stock markets with global ones.

As far as I know, SGX is encouraging foreign companies to list on SGX. However, companies must meet the requirements set by SGX. For example, companies must have the post tax profit of VND82bil at least in the previous three consecutive years. In addition, at least two members of the management boards of the companies must be Singaporean residents. The expenses for listing shares on SGX are relatively high.

However, I think several Vietnamese companies can meet the strict requirements to list on SGX if they are really determined to list on the bourse.

Don Lam: Director General of VinaCapital

If listing on SGX, Vietnamese companies would be able to mobilise capital in foreign currencies at low cost, while the listing would help polish the image of companies in the international capital market, as SGX is considered a fast-growing and safe market in the world.

The requirements set by SGX prove to be within the reach of some Vietnamese companies, namely Vinamilk, FPT, Sacombank and ACB (market capitalisation is more than $1bil).

I personally think that it would be better for banks to list on SGX instead of production and service companies, as banking is the sector attracting the special attention of foreign investors.

However, if banks list on SGX, there would be a big problem with the limitation on foreign ownership ratio in Vietnamese banks. If the Government allows a bank to list on SGX, it would have to allow the bank to offer more shares to foreign investors. When you list, you must offer ‘commodity’. Currently, the proportion of shares held by foreign investors in Sacombank and ACB has reached the maximum level. The foreign ownership ratio in local banks should be raised to 40-45% to ensure bustling transactions.

I have to remind you that Vietnamese companies should think carefully before listing shares on the international market in general and on SGX in particular. They have to know what they are after when listing on SGX, and they have to get ready to face unanticipated difficulties.

Nguyen Ho Nam, Director of Sacombank Securities Company

Listing on developed stock markets would create opportunities for Vietnamese companies to upgrade their operation apparatus, structure and corporate governance as well. It would also help diversify capital sources and minimise risks.

However, the biggest challenge for Vietnamese companies which plan to list on developed bourses is the difference between Vietnam’s accounting standards and international accounting standards. There will also be other barriers, including language, the difference in corporate governance standards, and the levels of knowledge about the market.

However, I believe that Vietnamese companies will list on SGX in the near future.

Hsieh Fu Hua, Managing Director of SGX

Several Vietnamese companies have expressed their desire to list on SGX. Any company which can meet our requirements can list on SGX.

We will create favourable conditions to help Vietnamese companies list on SGX, as the listing would benefit both stock markets, and listing companies would receive support from both the HCM City Securities Trading Centre (HSTC) and SGX.

We have sent staff to Vietnam to learn about the demand for listing of Vietnamese companies in order to give support if necessary.

Singaporean authorities, including SGX, have signed agreements on financial cooperation and technical assistance with the Ministry of Finance of Vietnam and State Securities Commission. Under the agreements, Credit Suisse and SGX will loan technical staff to Vietnamese authorities and assist them in securities listing operations.

Source: VNECONOMY