Issuing shares in Vietnam differed from procedures in other countries
as Vietnamese companies offered shares exclusively to existing
shareholders rather than seeking new ones, said deputy director of the
State Securities Commission Bui Hoang Hai at the "Steps preparing for a
successful IPO of enterprises" conference in Hanoi on Sept. 23.
The SSC drew attention to this distinction at the conference jointly
held by itself, the business and financial news Bloomberg and
Singapore 's Mileage Communications Group.
When
collecting opinions of existing shareholders, almost all investors
volunteered to buy additional shares, which led to successes for the
majority of share issuers, Hai said. "This can be considered a method to
force existing shareholders to buy additional shares," he added.
In other nations, shares are usually auctioned off to new
shareholders, the public or strategic investors. To ensure success,
issuers must then be transparent with all financial information and
reports to demonstrate their potential and improve their image in the
eyes of investors, Hai said.
Vietnamese enterprises
actually did not pay much attention to how best to attract investors so
as to make IPO successfully, he said.
To prepare for
IPO, most companies only submit a prospectus and documents to meet the
minimum requirements. "To make a successful IPO, companies need to map
out long-term strategies," Hai said.
Nguyen Ngoc
Canh, director of SSC's international co-operation department, said in
the context of the slowed local stock market, firms were faced with many
difficulties for their IPO despite profitable company performance.
Canh emphasised the crucial role professional consultants and
securities firms play in helping issuers create transparent and
comprehensive documents and financial reports as well as advising better
management and business strategies.
"Issuers could
publicise information in a timely manner and investors could understand
more about their businesses, as a result they could auction shares or
make IPO effectively," Canh said.
Yah Boh Tiong,
chairman of Mileage Communications Group, advised firms to faciliate
strong communication with shareholders, raise investor awareness of
company profiles and business performance.
Strategies to improve companies' images should be undertaken carefully
throughout three phases, including before IPO, leading up to IPO and
post-IPO, Tiong said.
Chairman of the Singapore
Securities Investors Association David Gerald said that it was essential
to create knowledgeable investors through education and information,
promote corporate transparency and corporate governance and safeguard
investors' rights.
"Good corporate governance practices translate into good corporate performance," he said.
According to the SSC, the aggregate value of all shares issued to the
public, employees, strategic partners and those auctioned at stock
exchanges by companies in the first half of this year reached about
74.96 trillion VND (3.84 billion USD).
The conference drew about 100 businessmen, security companies, as well as local and international experts./.
