AGMs shareholders show lack of interest in

There has been a distinct lack of shareholder attendance at certain AGMs this year, with some companies counting the number of participants on fingers.

The stock market has developed strongly over the past four years, leading to a wave of investors joining the market. According to the Vietnam Securities Depository (VSD), the number of securities accounts in Vietnam at the end of May had reached more than 7.9 million.

As a result, attendance figures at recent AGMs have recorded hundreds or even thousands of shareholders, such as steel giant Hoa Phat (353 attendees out of 617 shareholders), Masan Group (357), Saigon Securities (799), and Saigon-Hanoi Securities (1,633).

However, many AGMs have largely been ignored by all but a few shareholders.

The first case was the 2024 AGM of ICapital Investment Joint Stock Company, listed on the Ho Chi Minh Stock Exchange (HoSE) as PTC, which saw only six shareholders/authorized persons attending, who accounted for 54.48% of the total votes.

2024 is an important year for the business. PTC has targeted VND120 billion ($4.71 million) and VND105 billion in respective revenues for the Huong Linh 7 and 8 wind power projects in the central province of Quang Tri. Its pre-tax profit is expected to reach over VND19.1 billion ($750,340), an increase of 36.4% from 2023.

If these targets are met, PTC will be removed from the HoSE’s watch list. According to its 2023 audited financial statements, as of December 31, 2023, the company had suffered a loss of VND13.57 billion ($533,100).

Another case was Hai Ha Confectionery Joint Stock Company, listed on the Hanoi Stock Exchange (HNX) as HHC, with only five participating shareholders, representing 79.98% of the firm’s total votes.

Vimeco Joint Stock Company (HNX: VMC) had 19 shareholders in attendance, or 60.06% of the company's total votes, and Vietnam Salvage Joint Stock Company (unlisted public company market UPCOM: SAL) saw 20 participating shareholders, equivalent to 83.5% of the total votes.

The common point was that most of the above-mentioned AGMs had their proposals agreed upon almost unanimously. Experts attributed this to the fact that the companies’ business operations had hardly any unusual or discussion-worthy problems. The firms have been able to complete their business plans with complete shareholder trust in decisions made by their boards of directors.

Another reason appears to be that these businesses have a very concentrated shareholder structure, with ownership lying mostly in the hands of their leaders. Therefore, many small shareholders decided not to attend AGMs because they felt their comments or votes would have little impact.

In addition, some companies have had to reorganize their AGMs two or three times because attendance levels were far below the 50% prescribed by the 2020 Enterprise Law.

According to experts, an important reason why small shareholders are not interested in AGMs is that business leaders do not attach much importance to investor relations.

Nguyen The Minh, chief analyst at Yuanta Vietnam Securities JSC, acknowledged that relations have significantly improved, but are still not taken seriously enough by some enterprises, especially mid-caps.

Investor relations tend to be promoted when businesses have plans to issue new shares or are trying to create a pull-up effect on stock prices, before being generally ignored when the desired effect is achieved.

This can reduce investor confidence in a company's long-term commitment. In addition, it prompts stock surfing for profits among investors, he added.

Minh also proposed a ranking featuring a set of indexes to rank investor relations of listed companies.