The US partner interested in SOE equitization and stock market in Vietnam

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The meeting

At the meeting, Minister Dinh Tien Dung was pleased to receive the support and interests of the two guests in business development opportunities in Vietnam, especially through the stock market and SOE equitization.

Sharing the interests of Mr. David Shear and Mr. Steve Okun, the Minister said that the SOE equitization had been carried out for 25 years from 1992 up to now. Basing on the actual implementation of SOE equitization, the policies on SOE equitization had been innovated and improved towards the direction of the Party and Government. In the 2016-2020 period, the Party and Government continued to guide the implementation of SOE equitization and the subjects of equitization continued to be expanded to large economic groups and state corporations.

Under the schedule, 127 SOEs in the list are required to be equitized in the 2017-2020 period, of which, 44 SOEs will be equitized in 2017, 64 SOEs in 2018, 18 SOEs in 2019 and 1 SOE in 2020.

Recently, under the proposal of the Ministry of Finance, the Government has issued Decision 126/2017/ND-CP on transformation of SOEs into joint stock companies, in which increasing conditions and criteria for investors registering to become strategic investors together with responsibility and sanctions to ensure the compliance of the commitments; financial solution and enterprise valuation, enhancing the inspection and supervision of the equitization; regulations on the first share offering in terms of method and determination of starting price in the first share auction; and enhancing the publicity, transparency of the equitization.

Accordingly, the Vietnam’s Government aims to improve the efficiency of performance of enterprises in general and the transformation of 100% state-owned enterprises into joint stock companies in particular in the coming time effectively; continues to sell shares publicly and transparently, connecting the equitization with the development of the stock market and attracting investors to buy shares, contributing to the renovation of enterprise administration.

Regarding the development of the stock market, Minister Dinh Tien Dung said that Vietnam stock market had a strong growth in the first 10 months of 2017. By the end of October, VN-Index reached 837.28 points, up 4.1% from the previous month, up 26% from the end of 2016. The HNX-Index closed at 105.16 points, down 2.3% from the previous month, up 31, 3% over the end of 2016.

Market capitalization reached nearly 2.879 trillion VND, up 4.7 % from the end of previous month, up 48 % from the end of 2016, equivalent to 64 % of GDP, the highest level since the market opened.

About the derivatives market, from the opening up to now, the scale of transactions is increasing, showing great attraction. Total transaction volume reached 428,677 contracts, corresponding to a total contract value of 34,032 billion VND..

The transaction volume reached nearly 7,391 contracts per day on average, and the transaction value reached nearly 587 billion VND per session.

In the process of development of the stock market and promotion of the SOE equitization, the Ministry of Finance is keen to receive the interest of the partners as well as the support and experience sharing from the foreign consultants, especially the United States.

Thanks to information from the Minister, David Shear and Steve Okun expressed their willingness to cooperate in these fields.

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After the meeting, the two guests had a meeting with leaders of the Department of Corporate Finance and the State Securities Commission to discuss specific agreements