VinFast brings Vietnamese stock market closer to foreign investors: expert

By Ta Phu, Huong Dung
Mon, August 21, 2023 | 11:40 am GMT+7

The listing of Vietnamese electric vehicle (EV) maker VinFast on the tech-focused Nasdaq will make the Vietnamese stock market more popular among foreign investors, said Nguyen The Minh, chief analyst at Yuanta Vietnam Securities JSC.

VinFast’s official listing on the Nasdaq has attracted the attention of investors. What do you think about this?

In my opinion, VinFast has taken the first successful steps, but to achieve the purpose of raising capital, it depends on the firm’s own capacity.

The listing on the Nasdaq partly opens up opportunities for the company to raise capital from potential investors in the future to serve its main business activity - EV manufacturing - which is very capital-intensive.

VinFast's VFS stock was successful on its debut session, but it should be noted that the market price hike or capitalization is not enough to accurately reflect the company's valuation. In addition, the volume of floating VFS shares is only 1%.

Satisfying the conditions of capitalization, liquidity, floating share volume and listing time is very important. That is the basis for VinFast to enter the portfolio of Exchange Traded Funds (ETFs). This will help VinFast attract interest from funds that specialize in tracking ETF portfolios, indirectly having a positive effect on the stock.

In addition, raising capital on the Nasdaq (if successful) means helping VinFast avoid the "barrier" of foreign ownership limits found in Vietnam's stock market. This is an advantage for VinFast.

VinFast officials and foreign partners celebrate the debut of VFS stocks on the Nasdaq on August 15, 2023. Photo courtesy of the company.

VinFast officials and foreign partners celebrate the debut of VFS stocks on the Nasdaq on August 15, 2023. Photo courtesy of the company.

Many Vietnamese listed companies have announced they will list abroad, but VinFast is one of the first to succeed. In your opinion, what is the difference?

The difference here is VinFast's application of the SPAC (special purpose acquisition company) method, which helped it shorten its listing time and cost.

VinFast's listing is said have provided motivation for Vietnamese businesses, especially those that have previously cherished plans to list on international exchanges. What do you think about this?

VinFast has the two “firsts”. Firstly, it was the first company daring to venture into the field of EV production in Vietnam. Secondly, VinFast is the first large-cap company in the group of EV manufacturers on the Nasdaq.

This is a big motivation for Vietnamese enterprises, especially tech firms, that boast a relatively fast growth rate, but domestic capital mobilization is limited.

Listing and raising capital in developed markets is clearly one of the solutions to the capital problem for Vietnamese enterprises. Of course, they must ensure financial capacity and transparency.

Some say that VinFast’s listing on the Nasdaq has had a positive effect on Vietnam's stock market. What is your opinion?

This is the correct assessment as many foreign investors, investment funds and large organizations will start to learn more about Vietnam's stock market. We have created a good brand, but to help the Vietnamese stock market attract and retain foreign investment flows, it is necessary to have better capital circulation mechanisms and higher foreign ownership ratios in enterprises. We also need to meet Financial Times Stock Exchange (FTSE) and Morgan Stanley Capital International (MSCI) criteria.

In the most recent reviews, on the "foreign ownership limit" criterion, MSCI assessed that companies in sensitive industries and sectors still have foreign ownership limits of 0-51%. These limits affect more than 10% of stocks on the Vietnamese stock market.

For the criterion "Remaining room for foreign investors", MSCI believed that the stock market is heavily influenced by the issue of foreign room. More than 1% of the MSCI Vietnam IMI index is affected by low foreign room.

Meanwhile, according to the FTSE, the criteria "No or a selective ratio of foreign ownership" and "No or simple registration process for foreign investors" are both limited on the Vietnam stock market.

VinFast officially started trading shares on the tech-focused Nasdaq on August 15 (U.S. time). “Becoming a U.S.-listed company marks a significant milestone in VinFast’s global expansion,” VinFast CEO Le Thi Thu Thuy said in a statement.

The Nasdaq listing will enhance VinFast’s global outreach by facilitating even wider access to capital, she added.

VinFast, a member of Vietnam’s largest private conglomerate Vingroup JSC, is the country’s leading EV maker. Founded in 2017 as a producer of fossil fuel cars, it has shifted to total EV manufacturing. It makes and exports a portfolio of electric SUVs, e-scooters and e-buses across Vietnam, the U.S., and, soon, Europe.

Shares of VinFast dropped for a third straight session to $15.4 per share last Friday, from $20 on Thursday, $30.11 on Wednesday and $37.06 in the stock's Nasdaq debut.

Comments (0)
  • Read More
Vietnam’s inconsistent legal framework poses problems for FDI sector: Deep C exec

Vietnam’s inconsistent legal framework poses problems for FDI sector: Deep C exec

Vietnam’s legal framework lacks consistency and the foreign direct investment (FDI) sector will soon face challenges related to the Law on Environmental Protection, says Bruno Jaspaert, CEO of Deep C Industrial Zones.

Economy - Tue, November 19, 2024 | 6:30 pm GMT+7

Vietnam shares sink on extended foreign selloffs

Vietnam shares sink on extended foreign selloffs

Vietnamese equities fell for a fourth consecutive day on Tuesday as foreign traders extended their selling spree.

Finance - Tue, November 19, 2024 | 5:10 pm GMT+7

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