Consultative team for share auction and issuance to be set up

The Ministry of Finance (MoF) is preparing for the setting up of a team which will give advises to the ministry in building up the plans on issuing and auctioning shares of equitised enterprises, Vu Bang, Chairman of the State Securities Commission said yesterday.

All the enterprises, that go to equitisation and make IPO (initial public offering), especially the ones that have impacts on the market, must register to MoF, so that the ministry can have adequate information about the plans. The consultative team will give advises to MoF on the methods of securities issuance and the timing for IPOs, which will help make the plans successful, while not causing negative impacts on the market.

MoF thought of setting up the team after experts expressed the concerns about the massive IPOs of big equitised corporations, which is believed to make the market oversupplied with commodities. The experts have asked to retime the IPOs in order to avoid the oversupply, which may cause to the sharp share price decreases, and loss to the State.

The Prime Minister then released a document, asking the Ministry of Finance, State Bank of Vietnam and other relevant ministries to check the plans on equitising state owned enterprises in 2007.

The work needs to be completed in the second quarter of 2007 with the focus on big corporations, including state owned banks, economic groups and general corporations, which have big equitisation value.

Opinions vary about whether to delay the IPOs of equitised enterprises. Some experts said that the massive IPOs would bring too many commodities to the market, which will result in the dramatic decrease of share prices. Meanwhile, some others said that the delays would slow down the equitisation process, while the Government tries to push up the process.

As planned, in 2007, the State will equitise 26 general corporations. There will be big IPOs of big corporations, including Vietcombank, Incombank, and BIDV from now until the end of the year. The other 71 general corporations will be brought into equitisation by 2010.

Source: VNE