The Ministry of Finance, currently drafting a circular to regulate thesale of share lots offered by equitising State-owned enterprises (SOE),said it hopes to finalise the draft by the end of the month.
In recent years, the Government has encouraged SOEs to equitise,meaning many of these companies are entering the stock market. As theyenter the market, they must auction off their stock packages in largeshare lots.
Before the draft is finalised, some ofits current content was made public in order to garner feedback frominvestors and traders in Vietnam's stock markets.
Firstly, the circular would govern any SOE either unlisted on the stockmarket, or unregistered for trading on the Unlisted Public CompanyMarket (UPCOM).
The draft circular will likelyrequire investors interested in an SOE's share lot to purchase theentire package in the form of a public placement during the auction.
The management of share lot auctions would likely fallon the Ho Chi Minh Stock Exchange and the Hanoi Stock Exchange. Theywould be responsible for setting and managing certain basics like thenumber of lots offered in an auction, the number of shares in each lot,the initial price of the offered share lot, qualifications for theinvestor and solutions to settle problems that might arise.
The initial price of a share lot, according to the Ministry's recentround of proposals, should be calculated off share prices set by anindependent organisation or company. The costs involved in setting shareprices would be covered by the Fund for Business Development, launchedin 2002 to support the equitisation process of SOEs.
SOEs entering the market will have to decide how big they want theirshare lots to be. Besides taking into account market conditions,proposals have said that an SOE be limited to offering only one lot perauction and that each lot is at least 5 percent of the enterprise'schartered capital.
If an SOE decides it wants tosells its shares at a value lower than the independently set price, orsell off its stakes in financial institutions or commercial banks, bothsellers and buyers must stay in accordance with regulations set out inDecision 51/2014/QD-TTg issued on September 15.
If anauction somehow ends in a stalemate between two potential buyers, it isproposed that a private auction be held between those investors toconclude the matter.-VNA
In recent years, the Government has encouraged SOEs to equitise,meaning many of these companies are entering the stock market. As theyenter the market, they must auction off their stock packages in largeshare lots.
Before the draft is finalised, some ofits current content was made public in order to garner feedback frominvestors and traders in Vietnam's stock markets.
Firstly, the circular would govern any SOE either unlisted on the stockmarket, or unregistered for trading on the Unlisted Public CompanyMarket (UPCOM).
The draft circular will likelyrequire investors interested in an SOE's share lot to purchase theentire package in the form of a public placement during the auction.
The management of share lot auctions would likely fallon the Ho Chi Minh Stock Exchange and the Hanoi Stock Exchange. Theywould be responsible for setting and managing certain basics like thenumber of lots offered in an auction, the number of shares in each lot,the initial price of the offered share lot, qualifications for theinvestor and solutions to settle problems that might arise.
The initial price of a share lot, according to the Ministry's recentround of proposals, should be calculated off share prices set by anindependent organisation or company. The costs involved in setting shareprices would be covered by the Fund for Business Development, launchedin 2002 to support the equitisation process of SOEs.
SOEs entering the market will have to decide how big they want theirshare lots to be. Besides taking into account market conditions,proposals have said that an SOE be limited to offering only one lot perauction and that each lot is at least 5 percent of the enterprise'schartered capital.
If an SOE decides it wants tosells its shares at a value lower than the independently set price, orsell off its stakes in financial institutions or commercial banks, bothsellers and buyers must stay in accordance with regulations set out inDecision 51/2014/QD-TTg issued on September 15.
If anauction somehow ends in a stalemate between two potential buyers, it isproposed that a private auction be held between those investors toconclude the matter.-VNA
