Hanoi (VNS/VNA) - The slow listing ofpost-equitisation firms, including State-owned enterprises (SOEs), may makeVietnamese firms less attractive regarding a lack of corporate transparency andgovernment agencies managing those firms must be blamed for the problem.

According to the State Securities Commission (SSC), there were 413 companiesthat had not traded their shares on the stock market as of the end of 2018. Ofthe total, 195 companies are not equitised SOEs, namely Saigon-Hanoi InsuranceCorporation, Vietnam National Aviation Insurance Corporation, Petrolimex GroupCommercial Joint Stock Bank and Vietnam Thuong Tin Commercial Joint StockBank.

The remaining 218 companies are post-equitisation SOEs such as TransportEngineering Design Inc and Vietnam National Vegetable, Fruit and AgriculturalProduct Corporation.

According to Tran Minh Hai, Director of the banking-securities-investment lawfirm Basico, firm management boards are the first to blame for the problem asthey have not followed the rules to put those firms’ shares on the stockmarket.

In addition, punishments for the violations and delayed listing had not beenstrict enough to put pressure on the firms to trade shares, negativelyeffecting shareholders’ rights and benefits.

Government agencies and local authorities also had to take responsibility forthe problem as they, as the representative of the Government monitoring theState capital in those firms, had not performed well to push the firms to tradetheir shares on the stock market in the post-equitisation stage.

According to other analysts, companies delaying their listing will bring downinvestors’ confidence in the market’s transparency and openness, and result inlower quality of corporate governance in those companies due to lack of privateinvestors’ participation in the management board.

Listing and equitisation are seen as instruments to make corporate operationand business activity more transparent and public to investors, thus assuringthe benefits of investors when purchasing firms’ shares.

Transparency is also among key decisive factors that would determine whetherVietnam is admitted in global investment institutions’ revision for an upgradefrom “frontier” to “emerging market”, according to Bao Viet Securities Co’s headof market analysis and investment consultancy Pham Tien Dung.

That is expected to lure foreign capital into the Vietnamese equity market andboost the performance of local firms, Dung told Vietnam News in an email.

“If included in the re-classification review list (of the Morgan StanleyCapital International and Financial Times Stock Exchange), Vietnam may lure 1billion USD worth of capital from global exchange-traded funds and prove theVietnamese equity market is secure and big enough to receive largerinternational investors.”

“What needs improving at the moment includes the market and corporatetransparency, fair information accessibility to all investors, and increase offoreign ownership limit in local companies,” Dung said.

In 2019, the State will continue selling its stakes in local SOEs and the trendis “irreversible”, according to Dung.

“Recent successful State divestment deals such as brewer Sabeco and dairyproducer Vinamilk showed government agencies paid more attention to the demandand requirement of investors,” he said.

What weighed on investors’ sentiment was not only about the sectors and prices,but also about their participation in the post-IPO corporate management, hesaid, adding that was the key factor to make divestment and listing deals moreattractive.-VNS/VNA