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
Indonesia targets comprehensive fuel subsidy scheme reform

Indonesia targets comprehensive fuel subsidy scheme reform

Indonesian Energy Minister Bahlil Lahadalia has said the country is conducting a thorough exercise to reform its fuel subsidy scheme.

Southeast Asia - Mon, November 4, 2024 | 10:50 pm GMT+7

Tech companies invest in data centers in Thailand

Tech companies invest in data centers in Thailand

Thailand’s Board of Investment (BOI) has approved investment support for two large data centre projects in the country worth over THB60 billion ($1.7 billion).

Southeast Asia - Mon, November 4, 2024 | 10:49 pm GMT+7

Indonesia upgrades sea wall system to protect Jakarta

Indonesia upgrades sea wall system to protect Jakarta

Indonesian Coordinating Minister for Infrastructure and Regional Development Agus Harimurti Yudhoyono has stated that the construction of sea walls was one of the priorities of President Prabowo Subianto.

Southeast Asia - Mon, November 4, 2024 | 10:47 pm GMT+7

Where real estate and urban development meet

Where real estate and urban development meet

The Transit-Oriented Development (TOD) itself, if properly planned and implemented, can lower the barrier to the use of public transport, lessen the dependency on private vehicles, contributing to the liveability of communities and cities, write Avison Young Vietnam analysts.

Consulting - Mon, November 4, 2024 | 8:49 pm GMT+7

AI helps sellers offer competitive prices on e-commerce platforms: Lazada trainer

AI helps sellers offer competitive prices on e-commerce platforms: Lazada trainer

When sellers carry out promotions on e-commerce platforms, artificial intelligence can help ensure their prices remain competitive, says Nguyen Tran Tin, a seller and trainer at Lazada Academy.

Companies - Mon, November 4, 2024 | 8:07 pm GMT+7

Vietnam plans $7.3 bln rail route linking 2 northern provinces bordering China

Vietnam plans $7.3 bln rail route linking 2 northern provinces bordering China

Vietnam Railway Authority under the Ministry of Transport has proposed a 448-km long, VND183,856 billion ($7.26 billion) route running between the northern provinces of Lao Cai and Quang Ninh, both sharing a border with China.

Infrastructure - Mon, November 4, 2024 | 7:14 pm GMT+7

Vietnam agribusiness HAGL trains focus on domestic market, inks pact with Kingfoodmart

Vietnam agribusiness HAGL trains focus on domestic market, inks pact with Kingfoodmart

Vietnamese agri major Hoang Anh Gia Lai JSC (HAGL) is looking to tap domestic market potential afresh by distributing its products through the Kingfoodmart supermarket chain.

Companies - Mon, November 4, 2024 | 7:08 pm GMT+7

Mixed performance by Vietnam commercial banks in Q3

Mixed performance by Vietnam commercial banks in Q3

Vietnamese commercial banks have had a mixed third quarter, with some reporting substantial profit gains while others seeing steep declines or even losses.

Banking - Mon, November 4, 2024 | 4:52 pm GMT+7

Vietnam’s Vingroup, UAE's NMDC to collaborate in offshore wind power

Vietnam’s Vingroup, UAE's NMDC to collaborate in offshore wind power

Vietnam’s leading conglomerate Vingroup and the UAE-based NMDC Group will collaborate in offshore wind power, the latter said in a recent filing sent to the Abu Dhabi Securities Exchange (ADX).

Energy - Mon, November 4, 2024 | 4:20 pm GMT+7

Military-run Viettel Group has 2 more deputy general directors

Military-run Viettel Group has 2 more deputy general directors

General Phan Van Giang, Minister of National Defence, has appointed Cao Anh Son and Nguyen Dat as deputy general directors of Military Industry and Telecommunications Group (Viettel Group), starting last Friday.

Companies - Mon, November 4, 2024 | 3:14 pm GMT+7

Mega Long Thanh airport first phase should be completed in Sept 2026: senior parliament official

Mega Long Thanh airport first phase should be completed in Sept 2026: senior parliament official

Relevant agencies should prepare to complete the first phase of the $14-billion Long Thanh International Airport project on September 2, 2026, as soon as the Vietnamese National Assembly approves changes to the project, said a senior parliament member.

Infrastructure - Mon, November 4, 2024 | 12:44 pm GMT+7

Fed rate cuts, upgrading efforts to lure foreign investors back into Vietnam stock market: VinaCapital

Fed rate cuts, upgrading efforts to lure foreign investors back into Vietnam stock market: VinaCapital

The U.S. Fed’s rate cut cycle and the Vietnamese government’s fresh efforts to upgrade the local stock market status are likely to bring foreign investors back into the stock market next year, according to VinaCapital.

Finance - Mon, November 4, 2024 | 11:42 am GMT+7

Foxconn’s subsidiary Shunsin to invest $80 mln in northern Vietnam to produce integrated circuits

Foxconn’s subsidiary Shunsin to invest $80 mln in northern Vietnam to produce integrated circuits

Shunsin Technology (Bac Giang, Vietnam) Limited, a subsidiary of Taiwanese giant Foxconn, will invest $80 million in Vietnam’s northern province of Bac Giang to produce integrated circuits (IC).

Industries - Mon, November 4, 2024 | 10:44 am GMT+7

Q3 earnings of Vietnam’s listed firms up 21.6%: FiinGroup

Q3 earnings of Vietnam’s listed firms up 21.6%: FiinGroup

Net profits of listed companies in Vietnam increased 21.6% year-on-year in the third quarter of this year, maintaining a stable growth rate since the start of this year, according to local financial data provider FiinGroup.

Finance - Mon, November 4, 2024 | 9:31 am GMT+7

Thailand SCG’s revenue in Vietnam up 15% to $1.1 bln in Jan-Sept

Thailand SCG’s revenue in Vietnam up 15% to $1.1 bln in Jan-Sept

Thailand’s Siam Cement Group (SCG) recorded a revenue of THB36.71 billion ($1.08 billion) in Vietnam in the first nine months of this year, up 14.7% year-on-year.

Companies - Mon, November 4, 2024 | 8:00 am GMT+7

Nghiem Xuan Thanh appointed Party chief of Khanh Hoa province

Nghiem Xuan Thanh appointed Party chief of Khanh Hoa province

Nghiem Xuan Thanh, Party chief of Hau Giang province, was appointed by the Politburo, the country’s supreme decision-making body, to be Khanh Hoa province’s Party chief for the 2020-2025 term.

Politics - Sun, November 3, 2024 | 7:45 pm GMT+7