VietNamNet Bridge – Deputy Head of the Enterprises Renovation Department under the Government Office, Head of the Taskforce for Group and General Corporation Equitisation Nguyen Trong Dung has emphasized the need to ‘harmonise’ the IPOs (initial public offering) of big corporations, otherwise, the market will suffer from the imbalance in supply and demand.
Mr Dung said:
 | | Mr Nguyen Trong Dung, Deputy Head of the Enterprises Renovation Department under the Government Office, Head of the Taskforce for Group and General Corporation Equitisation | In the current period, the quality of equitisation, not the number of equitising enterprises, is put on top priority. Big enterprises, which operate in important fields are being brought into equitisation, therefore, the effective equitisation must be seen as the biggest requirement. The method of equitising and making IPOs are the two most important issues in equitising these enterprises.
Every equitising enterprise at this stage has the capital scale equal to 100 enterprises which were equitised previously. Every year, we plan to equitise several tens of these enterprises, therefore, this work must be carried out in a very careful way.
For example, we plan to equitise 26 state owned general corporations. The state, as the seller, needs to thoroughly consider the demand of the market.
Many experts think that there are signs of the ‘indigestion’ of the market as a series of big enterprises will be equitised and make IPO in the near future. Will the massive IPO make the market ‘overloaded’?
They have every reason to be concerned about this. We plan to equitise 26 corporations in 2007, and if we try our best, we can fulfill the plan. But if too many IPO are held at the same time, the supply will exceed the demand, and the state, as the seller of the commodity, will not obtain high results as expected.
In fact, ministries and branches have been aware of the risks that massive IPOs may bring to the market. The Prime Minister has assigned the Ministry of Finance to reconsider the IPO timing.
I have to point out that efficiency is the top priority in enterprise equitisation. The scenario that the IPOs of big corporations do not successfully draw the attention of investors must not occur.
If the supply exceeds the demand, the prices of enterprises will be low, thus making the State, as the seller, suffer. We still have 70 corporations to be equitised by 2010. In such circumstances, I think, the equitisation would only be completed in 2015. In order to make the equitisation process effective, I think, it is necessary to re-consider the IPO timing.
Will there be any changes in the IPO plans of big corporations?
The list and the roadmap for equitising economic groups and general corporations from now until 2010 has been approved by the Prime Minister. It is expected that from now to the year end, at least one big enterprise will make an IPO every month. As planned, Vietcombank will make IPO in July or August, while the Mekong Housing Development Bank (MHB) in the fourth quarter of the year.
Meanwhile, Sabeco and Habeco, two big brewery corporations, have hired foreign consultants, and now are under the process of corporate assessment. The biggest advantage of the two is that their member companies all have basically completed the equitisation. The two corporations are expected to make IPOs at the end of the third quarter of the year.
As scheduled, Vietnam Airlines will make an IPO at the end of 2008, while the Textile and Garment Group is likely to make an IPO sooner.
The Government has promulgated the new decree on equitising state owned enterprises, and under the spirit of the new decree, investors will be able to get information about the share issuance and auction more sufficiently and accurately.
(Source: Viet Nam Net) | 
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