HA NOI (VNS)— Loss-making and debt-laden enterprises are encouraged to exit the stock market as this would improve its efficiency.
This was the message from Tran Dac Sinh, chairman of the HCM City Stock Exchange, who believes strong measures must be take to foster economic growth.
He said: "There are a few tens of companies whose business and financial situations are not good for the stock exchange.
"This should not last forever, so such companies are encouraged to delist shares from the market," Sinh told the media.
"The market naturally will have both good and bad products but if they are too bad, they won't negatively affect the image of the market," Sinh said, noting those companies could voluntarily withdraw from the market or be forced to do.
As many as 22 companies left the stock exchanges last year, while another 14 faced the risk of having listings cancelled and one company was dissolved.
Only six companies voluntarily left the market while the remaining number were forced to cancel their listings due to prolonged losses, serious violations on the information disclosure regulation and other reasons.
According to market insiders, these delistings did not affect the market and in fact, they were necessary removals of bad products while creating pressure on other companies to improve their businesses, thereby gradually raising the quality of goods on the market.
The sources say there are still too many "waste" stocks on both exchanges which incurred big losses and had almost unworthy share prices.
However, while encouraging inefficient businesses to exit the market, Sinh said such decisions should be discussed thoroughly because they were required to follow strict procedures and consider the regulations protecting minor shareholders.
"Normally, major shareholders hold the highest voting percentage. It is difficult for small shareholders to express their opinions and certainly their interests will be affected," Sinh said. — VNS