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 percent of the international foreign currency exchange contributing 12 percent to London’s GDP and 2 percent 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.