New decree to help small investors

A new decree will help improve the quality of corporate governance in public companies and benefit small, individual investors, a senior official said yesterday. A new decree will help improve the quality of corporate governance in public companies and benefit small, individual investors, a senior official said yesterday.- Photo ssc.gov.vn Corporate governance has become an urgent issue for public companies as it affects a firm’s sustainability when its size and scale develops at a fast speed, Pham Hong Son, vice chairman of the State Securities Commission (SSC), said at a conference. According to the SSC, Viet Nam’s stock market has developed strongly since the beginning of the year. The benchmark VN Index on the HCM Stock Exchange jumped nearly 17 per cent during this period to close on Friday at 777.09 points and the HNX Index on the Ha Noi Stock Exchange has gained 25.5 per cent to end at 100.55 points. Market capitalisation has increased by 30.5 per cent. Son said that listed companies on both local exchanges have improved the quality of corporate governance and are aware of its essential importance. “The better corporate governance is, the more benefits small individual investors will get,” Son said. “The Government’s Decree 71/2017/ND-CP (Decree 71) enumerating the principles of corporate governance for public companies will help them manage their businesses better.” Decree 71, an upgrade of Circular 121/2012/TT_BTC (Circular 121) issued by the Finance…... [read more]

The equitisation of State-owned enterprises (SOEs) needs to be made in a substantive and comprehensive manner, and all violations, especially at big loss-making firms, must been strictly handled, an official has said. The remark was made by Tran Tien Cuong, who led a Central Institute for Economic Management (CIEM) group in compiling a report on accelerating SOEs restructuring in 2016-2020. He added the Government also needs to overhaul mechanisms and regulations on the rights and obligations of relevant parties during the restructuring process, especially equitisation. CIEM said in the report that SOEs restructuring is still sluggish and low quality. From 2016 to May 2017, 65 SOEs and five public service institutions were equitised. Thirty-eight SOEs had their value publicised but their equitisation plans haven’t been approved. Meanwhile, the value of another 107 firms is being verified. The report attributed the slow equitisation to the unchanged policy on the sale of SOEs’ shares, adding that many regulations are not practical, making equitisation unattractive to investors. According to CIEM, while eight SOEs announced bankruptcy from 2011 to 2015, only one went bankrupt from 2016 until now. The institute considers this number minuscule compared to how many loss-making SOEs need bankruptcy. Both creditors and employees not wanting bankruptcy is the main reason for the firms staying afloat, said Pham Duc Trung – head of CIEM’s reform and development board. Additionally, persons held responsible for loss-making projects and poor-performing firms have yet to be clarified. Other causes include shortcomings in financial and budgetary discipline…... [read more]

Illustrative photo (Photo: VNA)   Hanoi (VNA) – The equitisation of State-owned enterprises (SOEs) needs to be made in a substantive and comprehensive manner, and all violations, especially at big loss-making firms, must been strictly handled, an official has said. The remark was made by Tran Tien Cuong, who led a Central Institute for Economic Management (CIEM) group in compiling a report on accelerating SOEs restructuring in 2016-2020. He added the Government also needs to overhaul mechanisms and regulations on the rights and obligations of relevant parties during the restructuring process, especially equitisation. CIEM said in the report that SOEs restructuring is still sluggish and low quality. From 2016 to May 2017, 65 SOEs and five public service institutions were equitised. Thirty-eight SOEs had their value publicised but their equitisation plans haven’t been approved. Meanwhile, the value of another 107 firms is being verified. The report attributed the slow equitisation to the unchanged policy on the sale of SOEs’ shares, adding that many regulations are not practical, making equitisation unattractive to investors. According to CIEM, while eight SOEs announced bankruptcy from 2011 to 2015, only one went bankrupt from 2016 until now. The institute considers this number minuscule compared to how many loss-making SOEs need bankruptcy. Both creditors and employees not wanting bankruptcy is the main reason for the firms staying afloat, said Pham Duc Trung – head of CIEM’s reform and development board. Additionally, persons held responsible for loss-making projects…... [read more]

Mekong Capital, a Vietnam-focused private equity firm specialising in consumer-driven businesses, announced that its Vietnam Azalea Fund (VAF) had sold 75 per cent of its stakes in Loc Troi Group Joint Stock Company (Loc Troi), a plant protection, seedling supply, and food processing firm. Illustration RELATED CONTENTS: Mekong Capital to divest Loc Troi Mekong Capital invests in F88 Consumer-driven sectors shall thrive The deal took place on July 26, 2017 and 75 per cent of Mekong Capital’s stake in Loc Troi was sold at the price of VND68,000 ($3) per share, and Mekong Capital earned a total of $9.2 million. After nearly eight years since purchasing Loc Troi’s stakes, Mekong Capital’s divestment resulted in an internal interest rate (the profitability of potential investments) of about 18.6 per cent. On July 24, Loc Troi was listed under the ticker LTG on the Unlisted Public Company Market (UPCoM) and its closing price was VND58,500 ($2.6) per share, which raised its capitalisation to $174.8 million. In the trading session on July 25, Loc Troi implemented a put-through transaction of more than 3.4 million shares with the total value of over VND231 billion ($10.2 million), an equivalent of VND67,700 ($3) per share. Foreign investors purchased more than two million LTG stocks and sold over three million. Most LTG stocks held…... [read more]

Vietnam Annual Report Awards have unveiled the top reports of its 2017 edition. Winners of the 2017 ARAs  The list of the winners of the 2017 Annual Report Awards (ARAs) has been announced tonight in Ho Chi Minh City. This year also marks the tenth edition of the awards, jointly organised by VIR, Ho Chi Minh City Stock Exchange (HOSE), and the Hanoi Stock Exchange (HNX) with support from Dragon Capital. Out of the 638 eligible reports submitted by firms listed on HOSE and HNX, 125 have made it to the final round. The judges have hand-picked 50 reports to honour at tonight's ceremony, divided into the Top 10, the Top 30, and the Top 50. Some companies have earned bonus points for preparing their reports under International Financial Reporting Standards (IFRS) and for providing an English version. For the first time ever, the reports in the 2017 ARAs have been evaluated by four leading audit firms Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers. The number of judges also increased from seven to nine, with new members from Vietnam Securities Depository and Vietnam Chamber of Commerce and Industry. Similar to previous years, firms with outstanding reports on corporate governance and sustainability were also celebrated. “Throughout the past ten years, the ARAs have been tirelessly promoting information transparency in Vietnam,” said VIR’s editor-in-chief Le Trong Minh. Le Hai Tra, deputy CEO of HOSE,…... [read more]

The rate of registered businesses through the official website of Vietnam in the second quarter of 2017 exceeds the 10 per cent that the Vietnamese government required in Resolution 36a, according to the statistics of the Ministry of Planning and Investment. MPI is one of the seven government agencies that have completed 100 per cent of e-government missions outlined  in Resolution 36a The latest report on Resolution 36a announced by the Government Office shows that the ratio of business registration through the website http://dangkykinhdoanh.gov.vn in Vietnam is 39.8 per cent, higher than the 31.7 per cent of the first quarter of the year. Hanoi reached 65.9 per cent and Ho Chi Minh City 51.5 per cent. Ho Chi Minh City has a private registration channel with a total of 7,565 business registration files, occupying 12.6 per cent of the total business registration files in the quarter. Resolution 36a on e-government was issued on October 14, 2015, aiming to promote the development of e-government as well as improve the quality and efficiency of state agencies in order to serve people and enterprises better on the Internet platform. RELATED CONTENTS: Companies' registration reaches record high in first quarter of 2017 Online business registration hits new record high   By Ngan Quyen ... [read more]

The central bank on July 21 held an online conference to prepare for the implementation of the scheme to settle non-performing loans (NPL) and restructure credit institutions in the 2016-20 period. The central bank ​on July 21 held an online conference to prepare for the implementation of the scheme to settle non-performing loans and restructure credit institutions in the 2016-20 period. Addressing the discussion, State Bank of Vietnam (SBV) Governor Le Minh Hung talked about the implications of the National Assembly resolution on NPL settlement approved last month and Prime Minister Nguyen Xuan Phuc’s Decision 1058/QĐ-TTg on credit institutions restructuring in the 2016-20 period issued on July 19, which gave the scheme the green light. Besides bad debt settlement, the scheme lists objectives, principles, solutions and itineraries to restructure the system of credit institutions in the period. To implement it, Hung has asked all credit institutions to map out their own restructuring plans and submit it to relevant management agencies for approval. In their restructuring plans, institutions have to look at and assess their own finances, corporate governance, shareholders and charter capital ownership status.  They have to also detail the objectives, orientations and solutions proposed for their restructuring and for bad debt settlement for each year. Hung has instructed all credit institutions to set up steering committees focused on these issues so that they can spot and report hurdles in the implementation process to the central bank without any delay. As the process of restructuring credit institutions and settling bad…... [read more]

Over the past decade, Vietnam’s Annual Report Awards have not only championed high-quality, transparent reporting in Vietnam, but also promoted global standards on governance and sustainability.  Businesses receive recognition for outstanding financial and corporate reporting at Vietnam’s Annual Report Awards in Ho Chi Minh City, Photo: Le Toan Lasting legacy Vietnam’s Annual Report Awards (ARAs), organised by VIR, the Ho Chi Minh City Stock Exchange (HOSE), and the Hanoi Stock Exchange (HNX), with support from Dragon Capital, will celebrate their 10th anniversary this Tuesday, July 25, in Ho Chi Minh City. According to VIR’s editor-in-chief Le Trong Minh, the ARAs have had a major impact on Vietnam’s reporting standards in the past decade. In particular, the ARAs have honoured the most outstanding reports in Vietnam, as well as created added value for the practice. Besides financial results, annual reports have been encouraged to include details on risk management, investor relations, sustainability reporting, and corporate governance. Nguyen Thi Hoang Lan, deputy CEO of HNX, noted that these practices were generally non-existent in Vietnam in 2008, when the ARAs started. “No other publication can express a firm’s visions, strategy, and creativity like the annual report. Companies can use the report as a powerful communication tool to investors, and the ARAs have successfully promoted this idea in Vietnam,” said Lan.   Dragon Capital chairman Dominic Scriven, meanwhile, recalled the time when annual reports in Vietnam…... [read more]

At a meeting sponsored by the State Bank of Vietnam and the US Treasury Department, Le Thanh An, the US consul in HCM City, said the Treasury Department had an agreement with the SBV to provide assistance in a number of areas, including corporate governance. David Hawkins, the US Treasury banking advisor, said good corporate governance would create public trust and confidence in banks and the banking system. Banks should have an independent risk management function including a chief risk officer with sufficient authority, stature, independence, resources, and access to the board of management. Risk management information should be audited for accuracy periodically. The governance of a bank should be suitably transparent to its shareholders, depositors, stakeholders, and market participants. The role of the State Bank of Vietnam should include providing guidance to banks for effective corporate governance. It should regularly perform a comprehensive evaluation of banks' overall corporate policies and practices, and evaluate their implementation through inspecting internal reports. The central bank should insist on effective and timely remedial action by banks to address material deficiencies in their corporate governance policies and practices.... [read more]

The semi-annual review of the Vietnamese economy said the growth rate was the nation’s fastest in the first half of the year for the past five years. Against a backdrop of low inflation, the State Bank of Vietnam has gradually loosened monetary policy to spur growth while periodically adjusting the exchange rate to maintain external competitiveness, the report said. At the same time, Vietnam’s fiscal accounts emerge as a source of concern. The nation’s debt has risen rapidly in recent years, and debt servicing costs could pose an increasing burden on the budget. Meanwhile, a drop in exports and increased imports have resulted in current account deficit in the first quarter of 2015. Progress on SOE reform continues, but at gradual pace, with only 29 SOEs equitized in the first quarter of 2015 out of the annual target of 289. Implementing the legal and regulatory framework for SOE management and corporate governance issued last year and increasing percentage of ownership that can be acquired by the private sector, should remain key priorities. “Banking sector reforms continued during the first half of 2015, with a number of acquisitions of smaller banks by major state-owned commercial banks,” said Sandeep Mahajan, Lead Economist for the World Bank in Vietnam. “However, the lack of an appropriate legal framework and the VAMC’s own limited capital base and operational capacity remain constraining factors for resolving bad debts.” The Taking Stock report features a special section on the labor market in Vietnam, which details a dramatic shift…... [read more]




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