Vietnamese entrepreneurs, stock investors and financial experts from the
UK took part in a seminar in Ho Chi Minh City on September 26 to share their
experiences of the opportunities and challenges faced in the international
financial market via the London Stock Exchange.
The Lord Mayor of the City of
London, Alderman David Wootton said that the London Stock Exchange has more
than 3,000 listed enterprises, including 600 overseas companies, and can create
more opportunities for Vietnamese companies to issue international bonds.
Moreover, the fact that the
London Stock Exchange is now open to Vietnamese enterprises will help increase
access to foreign capital.
Nguyen Thi Hong, deputy
chairperson of the HCMC People's Committee, said the London Stock Exchange takes
up 30 per cent of the international foreign currency exchange contributing 12
per cent to London’s GDP and 2 per cent to the United Kingdom’s GDP.
However, participants also said
that taking parting in the London Stock Exchange will bring challenges to
Vietnamese enterprises. Representatives of PricewaterhouseCoopers Vietnam (PwC
Vietnam), with its headquarter in London, said Vietnam’s auditing standards are
different from international standards while the London Stock Exchange requires
enterprises’ financial reports to adopt the International Financial Reporting
Standards for Small and Medium sized Enterprises, which provide a substantially
simplified set of internationally recognized accounting principles specifically
for private firms.
In addition, investors normally
rely on any company’s internal management control. Hence, enterprises should
promote transparency in financial reporting and strong internal management
control or investors will turn their backs on the company. Financial statements
are the primary means of communication between management and shareholders,
banks, and other interested parties.
Another barrier is that
enterprises have to adopt legal requirements including restructuring, business
plans and financial statements, and laws on bribery and corruption when joining
the London Stock Exchange.
On being asked how Vietnamese
enterprises can access capital resources easily, Dang Quoc Tuan, Director of
Capital Markets Services of PwC Vietnam, said they should maximize profits,
enhance management control, and show transparency and detailed plans at first
bond issuance to people overseas, before asking for capital support.
Meantime, Stephen Revell, from
Freshfield Bruckhaus, said Vietnamese enterprises should employ lawyers who
will take part in listing procedures and tighten management and be very careful
in first bond issuance to the public.
A new Memorandum of Understanding
is being signed in HCMC on September 26 between UK Trade and Investment Vietnam
(UKTI) and the British Business Group Vietnam (BBGV), to cooperate more closely
to boost trade and investment between the UK and Vietnam during the visit to
Vietnam of the Lord Mayor of the City of London, Alderman David Wootton.
Under the three year MOU, UKTI
and BBGV will provide high-quality support to UK businesses with an interest in
Vietnam, both for establishing in the country and for exploring opportunities.
They will also work together to encourage more Vietnamese companies to consider
investing in the UK.
The Lord Mayor is presently
heading a business delegation to Vietnam from September 22-26. The main focus
of the visit is to promote the expertise of the City of London in Vietnam and
to support UK’s commitment under the Strategic Partnership Agreement between UK
and Vietnam.
SGGP
Business & Investment Opportunities
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