Vietnamese companies may list on SET

Following the sharp decline in the Ho Chi Minh Stock Index, stock investors in Vietnam have lost their appetite for initial public offerings, as a result of which Tisco Securities has approached Vietnamese firms about listing on the Stock Exchange of Thailand (SET), he said.

The Ho Chi Minh Stock Index has been the world's fourth worstper¬forming bourse so far this year, with a 43percent tumble following investor concerns that the worst inflation in 16 years has dimmed Vietnam's growth prospects, widened that country's trade deficit and increased risk of currency deval¬uation. The composite SET Index has fallen about 20 per cent this year.

Vietnamese companies likely to list on the SET are domestic demandrelated companies, each one with market capitalisation of more than $500 million. A firm with market capitalisation of less than $500 mil¬lion is not attractive, he said.

However, Paiboon did not reveal how many Vietnamese companies might seek listing on the Thai bourse.

Tisco Securities last year signed a cooperation agreement with Sacombank Securities of Vietnam to expand activities in the two coun¬tries, including investment banking, brokerage, investment and research.

However, Paiboon said listing Vietnamese companies would not be possible this year, because they were asking the Stock Exchange of Thailand for some privileges.

Two jointventure deals between Thai and Vietnamese companies engaged in construction materials will be announced this year, he said. Tisco Securities is the financial advis¬er for both of them.

Separately, SET Senior Vice President, Listing & Investment & Marketing Center Division Chainitr Charnchainarong yesterday said the SET was carrying out a study to amend listing regulations concern¬ing duolisting to comply with Ho Chi Ming Stock Exchange and stock markets of Lao and Cambodia to be inaugurated in 2010 and 2009, respectively.

He said around 710 nonand list¬ed companies in Vietnam with a com¬bined market cap of Bt50 billion attended the Thai stock market's roadshow between August 21 and 22.  At the moment, there are 156 com¬panies listed on Ho Chi Minh Stock Exchange with a total market cap of $12 billion.

For Vietnam case, information disclosure about financial results was the discrepancy between the Thai and Vietnamese stock market, he added.

The SET requires listed compa¬nies to disclose financial earnings on quarterly basis but Ho Chi Minh Stock Exchange requires listed com¬panies to release financial results on six month basis. 

Templeton Asset Management executive chairman Mark Mobius recently said Vietnam's stock market offered investment opportunities after a 43percent slump this year. His company last week opened a rep¬resentative office in Ho Chi Minh City.

"Vietnam's stock market now is down, so there are more opportuni¬ties," Mobius said in an interview with Bloomberg in Ho Chi Minh City.

"The market will go up and be much more valuable in about three years."

Mobius, who oversees about $40 billion worth of emergingmarket equities, is increasing Templeton's investments in Vietnam after it bought a 49percent stake in Vietcombank Fund Management, the fundmanagement unit of the JointStock Commercial Bank for Foreign Trade of Vietnam, earlier this year.

Templeton is turning to emerging markets as stocks tumble more than can be justified. Demand for raw materials continues to boost eco¬nomic growth in those nations. The MSCI Emerging Markets Index has plunged 29 per cent since reaching a record high last October.

In Vietnam, Templeton will invest in retail banking, manufacturing and agriculture companies on Ho Chi Minh City Stock Exchange, Mobius said. He expects the country's econ¬omy to expand about 6 per cent this year.

The country also reduced its eco¬nomicgrowth forecast to 7 per cent, from 9 per cent in April.

Vietnam's central bank has raised interest rates three times this year, in order to ease inflation.

"Inflation is high, but we are happy to see the government is acting rapidly and very strongly to beat inflation," Mobius said. "But that's also why the stock market looks attractive."