During a discussion about the equitisation of state-owned enterprises (SOEs) held on June 3, the Vietnam Business Forum (VBF) said that there has been a slowing trend.
Dominic Scriven, CEO of Dragon Capital Group, remarked that the process has slowed due to the slump in the stock market. The group suggested that the government set new goals with specific timelines to help the market.
Scriven specifically emphasised the importance of equitising the telecom and banking sectors.
He also outlined the need to determine the takeover value of the enterprise by hiring private foreign consulting firms. Successful equitisation is ideally beneficial to both investors and owners, and requires that there be a sufficient amount of shares to be sold at attractive prices.
The enforcement of mandatory listing is also key to the process. However, even though the law states that SOEs going through equitisation must list within 12 months of the successful completion of the process, few firms have followed this rule. VBF has confirmed that they have received suggestions that SOEs be forced to list within one month of being equitised.
Terry Mahony, Chairman of Vincapital, a fund management company, said the lack of experience of managers for banking issues is one of the main causes for the slow progress. If the bad debt problem is not solved, the economy's liquidity will suffer, he added.
Current estimates of bad debt in the system are generally seen as unreliable, proving that the economy as a whole is in need of more transparency in financial reporting. Mahony suggested that the government make bold policy moves to reform the banking system and speed up equitisation of SOEs.