SOEs urged to tap stock market for growth capital

HÀ NỘI — Securities regulators have underscored the increasingly important role of state-owned and state-backed enterprises listed on the stock market as the country seeks to attract larger domestic and international capital flows to support ambitious economic growth targets in the coming years.Speaking at a conference on public company regulations on May 14, officials from the Ministry of Finance and the State Securities Commission (SSC) said the listing and registration of state-owned enterprises (SOEs) on the stock exchange is no longer merely a legal compliance issue following equitisation, but has become a strategic requirement for capital mobilisation across the economy.State Securities Commission of Việt Nam Chairwoman Vũ Thị Chân Phương said Việt Nam's potential upgrade by FTSE Russell to secondary emerging market status could create significant opportunities to attract international investment flows, particularly from long-term institutional funds and passive global investment funds.“In that context, state-owned enterprises listed or registered for trading on the stock market play an especially important role because they possess large market capitalisation, operate in key sectors of the economy and can create strong attraction for both domestic and foreign capital flows,” she said.The Government has set a target of achieving double-digit economic growth during the 2026-2030 period, increasing pressure on state-owned enterprises to expand production and business activities beyond the limits of existing resources.Vũ Hồng Phương, general director of the Department of State-Owned Enterprise Development under the Ministry of Finance, said relying solely on internal resources from SOEs and the state sector would not be sufficient to achieve the country’s growth ambitions.“Enterprises need to mobilise capital from multiple channels, including the stock market,” Phương said.Despite the strategic importance of listed state-owned enterprises, regulators acknowledged that many companies with state origins continue to face compliance problems relating to public company status and listing requirements.According to reviews conducted by management agencies, 67 out of 789 enterprises originating from state-owned companies have yet to satisfy shareholder structure requirements. Under current regulations, at least 10 per cent of voting shares must be held by a minimum of 100 non-major shareholders.Another 53 enterprises have failed to meet capital requirements, which stipulate a contributed charter capital of at least VNĐ30 billion. Several companies have also yet to list or register their shares for trading on the stock market despite post-equitisation obligations.Previously, several major listed enterprises with state origins simultaneously announced that they no longer met the conditions to maintain public company status, including Binh Son Refining and Petrochemical JSC (ticker BSR), DHG Pharmaceutical JSC and PV Gas.Officials said one of the largest obstacles remains the extremely low free-float ratio at many state-controlled enterprises, where major shareholders or the State often hold between 90 per cent and 99 per cent of charter capital.To address the issue, regulators are considering two major groups of solutions.The first would involve large shareholders, particularly State shareholders, reducing ownership stakes through public auctions or on-exchange transactions to improve free float and shareholder diversification.The second solution would allow enterprises to issue additional shares to increase charter capital and dilute the ownership ratio of existing major shareholders.According to officials, companies could mobilise capital through multiple channels, including public offerings, private placements to strategic investors and employee stock ownership plan issuances.Among these methods, private placements are viewed as more flexible because they do not require companies to meet profitability conditions or avoid accumulated losses, unlike public offerings. — BIZHUB/VNS