ne week after signing an historic trade agreement,
Vietnam officially opened its first stockmarket. Based in Ho Chi Minh
City, it was an idea Vietnam had been flirting with since 1993.
It may be some time though before it registers on the radar screens
of the world's big foreign investors as Bella Saer reports:
"Capitalism Vietnamese style is always going to be different. So,
while the Ho Chi Minh stockmarket is officially open, there was no
trading. Exchange director Vu Bang had already told the official media,
that owners of the shares of the four companies permitted to trade
would have to wait 10 days before selling in order to comply with
Vietnamese paperwork.
"Financial analysts say a comprehensive system of regulation
has been put in place, long before a single share is traded. John
Shrimpton, the director of Dragon Capital in Ho Chi Minh City, does
not think the four Vietnamese companies listed will set the investing
world alight just yet."
"I think the significance is enormous. The country is also engaging
in a process of equitisation which is generally the equivalent of
privatisation. One of the key obstacles that that process has faced
historically is obtaining valuation or valuing assets as they pass
essentially from state hands to private hands and that is perhaps
understandable where corruption is now very much the public enemy
number one from the government's perspective."
Vietnamese executives involved are expressing excitement
at the opportunties of stockmarket-led growth.
Bella
Saer
"Do Van Trac, of the Cables and Telecommunications Material Joint
Stock Company, said he was both excited and nervous at the pressures
a stockmarket listing would bring.
"He said it would require the company's managers to be 'more
dynamic and more serious.' Dragon Capital's John Shrimpton thinks
the stockmarket's opening in Ho Chi Minh City should be seen in the
light of a number of steps made by Vietnam's Communist Government
to embrace the world trading system.
"The volumes are likely to flow much more from domestic participants
on the investor side than from foreign participants, and I think in
a lot of ways the authorities at this early stage are not going to
be too bothered about that.
The greater point is really moving from having no market, to a mechanism
in place that will serve to supplant what already has been a relatively
active curb market, or over-the-counter market, and to bring that
in to a central market point , with all of the benefits of transparency
of pricing and liquidity that really flows from that."
Stockmarket or not, Vietnam has a tough task persuading foreign
investors to return. Many had their fingers burnt after making
investments between 1993 and 1999.
John
Shrimpton
