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Capital markets lack sufficient transparency

Update: August, 25/2012 - 09:08

KHANH HOA — Transparency of the capital market remains poor and mechanisms, management capacity and market surveillance are not sufficient, thus impeding capital development and capital mobilisation, both domestically and internationally, said experts.

The assertion was made at a two-day seminar entitled "Development of capital markets in restructuring the financial system in Viet Nam", held by the National Financial Supervisory Committee with participation of over 100 delegates including finance managers, researchers, and domestic and international investors.

The seminar concluded yesterday afternoon in central Nha Trang City, Khanh Hoa Province.

Speaking at the seminar, deputy director of auditing services for Ernst & Young Viet Nam Tran Phu Son said businesses needed to make their financial information more transparent to attract investment capital.

Chairman of the National Financial Supervisory Committee Vu Viet Ngoan said improving the quality of information in prospectuses, especially for newly-listed companies, was required as prospectuses help investors make their profitability assessments and create their prospects of listed companies before finalising their decision to invest or not.

A decision based on a lack of information or inaccurate information would cost investors dearly, though newly-listed companies would suffer immediate loss regarding capital mobilisation and an inability to attract strategic investors.

Accordingly, poor prospectuses, especially those of companies with large capitalisation, could lead to a decline of faith and public confidence, creating disorder in the finance market.

Le Duc Tho of the Viet Nam Bond Market Association (VBMA) said he wanted to ask the authorised bodies to allow the VBMA to be involved in market development activities, including developing standard training programmes and market conventions.

The VBMA wants to become a centre of corporate bonds specialising in collecting and processing any information regarding transactions and performance in secondary and primary markets.

Viet Nam is now home to 105 securities companies and 47 investment fund management companies, with more than 700 listed companies with a market capitalisation accounting for 40 per cent of the country's GDP.

Also at the seminar, Mark Cassidy, head of the Monetary Policy Division and senior economist in the Statistics Division of the Central Bank of Ireland, shared his experiences with a talk entitled ‘Capital Flows into Ireland: Recent Experience and Policy Lessons'. — VNS

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