CEO of SSI Securities Corporation Nguyen Duy Hung (Photo: Vietnam Finance)Hanoi (VNA) - Transparency andquality of information disclosure are the main concerns for market members,public companies and auditors to lure a larger amount of capital in 2019,business executives have said.
Nguyen Duy Hung, CEO of SSI Securities Corporation,said that the securities market should be the most important fund-raisingpassage for local companies.
However, still weighing on the confidence of bothdomestic and foreign investors in local firms were the transparency and qualityof information disclosure, which had not been ensured, Hung told a recent meeting heldby the State Securities Commission.
“We need to build the securities market and turn itinto a channel, helping local firms attract capital investment. But key issuesare market transparency and confidence,” he said.
According to Hung, the total amount of equitycapital among local firms is still small with most coming from State-ownedenterprises when the Government sold its stakes to outside investors, then fromprivate-equity firms such as Vingroup, Masan and Hoang Anh Gia Lai. The totalamount of corporate bonds, which is estimated at 100 trillion VND, comes fromthose private-equity firms and bondholders which are mostly commercial banks.
It was necessary to help the securities market beatcommercial banks to become the first capital resource for Vietnamese firms, hesaid, adding local companies had not seen investors as partners but only as“cash machines” for their business activities.
To improve transparency and help investors avoidpotential risks, intermediary financial firms should be empowered to developmarket indices as they were the ones that closely worked with the market andinvestors, he added.
In addition, local firms must be audited byindependent auditing firms such as the “Big Four” auditing firms – KPMG,Deloitte, Earnst & Young, and PwC – to raise their quality and accuracy ofinformation disclosure, Hung said.
“Such actions will help gain investors’ confidenceand assist government agencies to monitor the market more closely, fairly andtransparently, thus making market trading less risky for inexperiencedinvestors.”
According to Ha Thi Thu Thanh, Deloitte VietnamCEO, the transparency of a business is often reflected by its financial report.“However, financial reports released by local firms often lack necessaryinformation.”
“Financial reports and statements must be auditedso that investors and market regulators can see a clearer picture on how thebusiness is operating,” she said.
Financial audits must be done regardless of firms’status (whether they are listed, unlisted or done with IPO) to make sure theywere transparent to investors, she added.
In addition, she urged market regulators to makethe securities law corresponding to the independent audit law so that localfirms, especially listed ones, would be able to use international financialstandards to look for external financial resources. A corporate governance scorecard may also be a wayto keep local firms transparent, Thanh said.
The scorecard would make the boards of managers anddirectors work more closely to each other, improve their independence againsteach other, and so, raise the internal strength of the business, she said.-VNA
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