Changes in Vietnam IPOs will trigger stronger foreign capital inflows: JICA expert

By Anh Minh
Wed, September 25, 2024 | 5:51 pm GMT+7

Kojima Kazunobu, a consultant of the Japan International Cooperation Agency (JICA), offers insights into the appetite of foreign investors, including Japanese ones, on the Vietnamese stock market, including initial public offerings (IPOs).

He was speaking on the sidelines of the launching seminar of the technical cooperation project “Capacity building on promoting efficiency of Vietnamese equity market” between JICA and the State Securities Commission of Vietnam (SSC) on Monday.

This project follows the JICA's "Project for capacity building on improving fairness and transparency of Vietnamese equity market" implemented from 2019 to 2023.

 Kojima Kazunobu, a consultant of JICA, speaks to reporters in Hanoi, September 22, 2024. Photo courtesy of JICA.

Kojima Kazunobu, a consultant of JICA, speaks to reporters in Hanoi, September 22, 2024. Photo courtesy of JICA.

What aspects of the market does this project focus on?

This project has three main areas. The first is "strengthening market surveillance capacity," which aims to strengthen the detection, management, and prevention of unfair trading by securities authorities and exchanges.

The second is "improving and developing the quality of market intermediaries." Market intermediaries refer to securities companies and fund management companies.

The third is "improving capacity in managing public offerings and listings." This includes public offerings according to international standard methods (underwriting/book building), strengthening listing standards and examination, and strengthening disclosure, including non-financial information of listed companies.

Could you tell us about the difficulties in implementing the first phase of the project and the results achieved by the previous project?

The biggest challenge of the previous project, which was implemented from April 2019 to March 2023, was that face-to-face activities were not possible from early 2020 to August 2022 due to the impact of Covid-19.

As a result, most of the project period was conducted online, and I believe that the expected results in terms of hands-on support such as improving business flow were not achieved.

However, on the other hand, we focused resources on online activities and carried out a variety of activities, including advising on the drafting of decrees and circulars related to the Securities Law 2019, policy dialogue with senior officials from the Financial Services Agency to formulate the "Securities Market Development Strategy for 2030," online seminars for listed companies attended by nearly 600 companies, and dozens of lectures featuring active practitioners from the Financial Services Agency, SESC, JPX, and the JSDA.

These diverse activities generated great results in terms of providing knowledge of equity capital markets in Japan and around the world.

What are the biggest expectations for the cooperation project between the SSC and JICA given the Vietnam Stock Market Development Strategy to 2030?

It would be great if the two SSC-JICA projects (the previous project implemented from 2019 to 2023 and this new project) could contribute to upgrading the Vietnamese market to an "emerging market" status and its integration into the international capital market.

Looking towards 2030, I think it would be a great achievement if we could advance the "strengthening of the primary market in line with international equity capital market standards" and "utilization of effective self-regulatory organizations," as recommended in the previous project.

When do you expect the Vietnamese stock market to have its status upgraded, and what impact will this event have?

Regarding this issue, I am aware that the Vietnamese authorities are actively implementing measures, such as repealing pre-funding rules for foreign investors, with the aim of upgrading by 2025. They are engaging in dialogue with MSCI and FTSE as well as campaigning in Singapore and Japan.

I hope that Vietnamese authorities will continue to implement measures to address the issues raised through dialogue with MSCI and FTSE, and that an upgrade to the government's rating in 2025 will be realized.

What are your expectations for this project regarding benefits for foreign investors, including those from Japan?

This project has three major themes: "Strengthening market surveillance," "Improving and developing the quality of market intermediaries," and "Improvements in public offerings and listings in line with international standards."

Regarding the third of these, "Improvements in public offerings and listings in line with international standards," it is expected that may lead to significant future change that is favorable for foreign investors if progress can be made in discussions to shift Vietnam's current IPOs, which are conducted by auction, to an underwriting and book building method in which IPOs are launched simultaneously with listing approval.

If this can be achieved, foreign investors, including Japanese investors, will be able to invest in attractive newly listed stocks from the IPO stage, which is expected to increase their investment opportunities in Vietnamese stocks dramatically.

How interested are Japanese investors in the Vietnamese stock market? What improvements do Vietnamese stocks need to make to attract more foreign capital?

There is potentially a lot of interest from foreign investors including Japanese investors in the Vietnamese stock market. If large companies and emerging companies with investment appeal raise funds through IPOs and go public, a large amount of foreign funds will flow in.

Unfortunately, IPOs and new listings on the Vietnamese stock market have been stagnant in recent years.

In addition, the best opportunity for foreign investors to invest in Vietnamese stocks is to participate in an IPO. Still, Vietnam's current IPOs by auction make it difficult for them to participate. In this regard, it is hoped that an IPO method compatible with international standards such as underwriting/book building will be established.

Comments (0)
  • Read More
Germany’s household product firm QuickPack to invest $32 mln in Vietnam

Germany’s household product firm QuickPack to invest $32 mln in Vietnam

Germany’s QuickPack, a specialist for household goods and hygiene products, will invest €30 million ($31.8 million) in Vietnam’s Mekong Delta province of Long An.

Industries - Tue, November 19, 2024 | 4:24 pm GMT+7

Malaysian millionaire willing to invest in convicted Vietnamese tycoon’s property project: lawyers

Malaysian millionaire willing to invest in convicted Vietnamese tycoon’s property project: lawyers

Malaysian millionaire Vincent Tan has evinced investment interest in a residential project owned by convicted tycoon Truong My Lan, chairwoman of Van Thinh Phat Group, lawyers for the latter have disclosed.

Real Estate - Tue, November 19, 2024 | 4:17 pm GMT+7

‘Bottleneck of bottlenecks’ continues to dog Vietnam's property, infrastructure projects

‘Bottleneck of bottlenecks’ continues to dog Vietnam's property, infrastructure projects

Limited consultations between state agencies and the parliament’s primary focus on wording are issues with Vietnam’s legal framework adversely affecting property and infrastructure projects, say experts and corporate leaders.

Economy - Tue, November 19, 2024 | 3:40 pm GMT+7

President Xi Jinping hastens construction of 3 Vietnam-China rail routes

President Xi Jinping hastens construction of 3 Vietnam-China rail routes

Chinese President Xi Jinping has called for more substantial cooperation between China and Vietnam, including the pacier implementation of three railway routes linking the two nations.

Infrastructure - Tue, November 19, 2024 | 3:08 pm GMT+7

Vietnam developers offer deferred principal payments, interest support to boost year-end sales

Vietnam developers offer deferred principal payments, interest support to boost year-end sales

Vietnamese housing developers are offering several incentives including deferred principal payments and interest support to stimulate demand and boost liquidity as the year nears its end.

Real Estate - Tue, November 19, 2024 | 2:29 pm GMT+7

Australia's EQ Resources acquires TMG Group with Vietnam-based ferrotungsten factory

Australia's EQ Resources acquires TMG Group with Vietnam-based ferrotungsten factory

Australia-based EQ Resources Limited has acquired its fellow firm Tungsten Metals Group (TMG), which owns and operates the largest ferrotungsten (FeW) factory outside China.

Companies - Tue, November 19, 2024 | 11:00 am GMT+7

Techcom Securities becomes largest broker in Vietnam by capital base

Techcom Securities becomes largest broker in Vietnam by capital base

Techcom Securities JSC (TCBS) has become the largest securities company in Vietnam by charter capital after finishing a rights offering last week.

Finance - Tue, November 19, 2024 | 9:11 am GMT+7

Vietnam airport operator ACV looks to better exploit non-aviation service potential: exec

Vietnam airport operator ACV looks to better exploit non-aviation service potential: exec

Vietnam's airports operator ACV expects to earn $145 million from non-aviation services this year, accounting for around 18.83% of its total revenue, which is modest compared to other countries, said deputy general director Nguyen Duc Hung.

Companies - Tue, November 19, 2024 | 7:45 am GMT+7

The Investor to host seminar on removing legal bottlenecks for infrastructure, property investment

The Investor to host seminar on removing legal bottlenecks for infrastructure, property investment

A seminar themed “Removing legal bottlenecks for infrastructure and property investment” will be organized by The Investor in Hanoi on Tuesday.

Companies - Tue, November 19, 2024 | 7:00 am GMT+7

Indonesia promises Asia-Pacific investors more incentives

Indonesia promises Asia-Pacific investors more incentives

Indonesian President Prabowo Subianto recently told the press that he will create more incentives and expand special economic zones (SEZs) so as to lure investors from Asia-Pacific.

Southeast Asia - Mon, November 18, 2024 | 11:01 pm GMT+7

Indonesia, Brazil enhance aviation cooperation

Indonesia, Brazil enhance aviation cooperation

Indonesia's state-owned aircraft manufacturer, Dirgantara Indonesia (DI), and Brazilian aerospace company Embraer have signed a memorandum of understanding (MoU) to expand collaboration in the commercial aviation sector.

Southeast Asia - Mon, November 18, 2024 | 11:00 pm GMT+7

Indonesia eyes to become member of BRICS

Indonesia eyes to become member of BRICS

Indonesian President Prabowo Subianto has shown his country’s desire to become a member of the BRICS - the alliance of major emerging economies initiated by Brazil, Russia, India, China, and South Africa.

Southeast Asia - Mon, November 18, 2024 | 10:57 pm GMT+7

Former Party chief, chairman of Vinh Phuc province face disciplinary action

Former Party chief, chairman of Vinh Phuc province face disciplinary action

Vietnam’s Central Inspection Committee has proposed disciplining Pham Van Vong, former Party chief of Vinh Phuc, and Phung Quang Hung, former chairman of the northern province, for violations related to Phuc Son Group.

Politics - Mon, November 18, 2024 | 9:17 pm GMT+7

Shaping a waterway into a key shipping channel: Viconship gets dredging nod

Shaping a waterway into a key shipping channel: Viconship gets dredging nod

A major dredging project will allow safer ship navigation and increased cargo transportation capacity on the Hai Phong shipping channel, thereby enhancing competitiveness of Vinconship’s port system, says the company.

Companies - Mon, November 18, 2024 | 7:08 pm GMT+7

Former assistant to State President appointed general director of state-owned financial firm HFIC

Former assistant to State President appointed general director of state-owned financial firm HFIC

Truong Tuan Anh, an official at the State President Office and former assistant to a state president, has been appointed general director of Ho Chi Minh City Finance and Investment Stated-owned Company (HFIC).

Companies - Mon, November 18, 2024 | 5:35 pm GMT+7

MBBank’s takeover of weak OceanBank to have limited impact on its credit profile: Fitch

MBBank’s takeover of weak OceanBank to have limited impact on its credit profile: Fitch

Military Commercial Joint Stock Bank's (MBBank) takeover of Ocean Commercial Bank Limited (OceanBank) will have limited financial impact on the former’s credit profile, Fitch Ratings said Monday.

Banking - Mon, November 18, 2024 | 5:06 pm GMT+7