VN ramps up SEO equitising

THE PROCESS of equitising state-owned enterprises, which has been slower than expected, is likely to get a boost after Prime Minister Nguyn Xun Phc recently instructed Minister of Finance inh Tin Dng to take charge of the task and achieve a breakthrough.
The fact that this is the first time that a prime mister has assigned such a mission to his finance minister indicates his determination to both speed up the process and make specific organisations and individuals accountable.
Speaking at a recent conference on budget finance, where the PM called for speeding up the equitisation process and state firms’ divestment from noncore businesses, he said he wants a smaller public sector and every SOE to be strong.
“To achieve a breakthrough, I urge the finance minister to act as the commander, taking the key responsibility in this battle and coming up with policies and mechanisms to achieve the goal.”
He also instructed the finance ministry to improve the legal framework for the capital and securities markets to international standards.
The ministry has been taking the charge of working out recommendations and offering consultancy to the Government on equitisation related issues such as corporate valuation and sticking SOE equitisation to listing (the equitisation followed by listing) on the country’s stock exchanges.
Speaking about the equitisation process in 2011-15, the Steering Committee on Corporate Renovation and Development said despite certain accomplishments, it has yet to reach the desired quality or quantity.
In the past 15 years the number of SOEs has fallen from around 6,000 to over 700.
Between 2011 and 2015 almost 600 SOEs were equitised, or 96 per cent of the targeted number.
But a mere 8 per cent of the companies’ shares were sold to the public and the state still holds 92 per cent, and this has been blamed on the small size of the initial public offers.
The Government recently announced a change in strategy. Prime Minister’s Decision 58/2016/QTTg issued last month fixes the rate of state ownership in individual firms that are to be equitised rather than the sectorwise rate the Government used to fix earlier.
Attached to the decision is a list of 103 SOEs in which the Government will retain 100 per cent stake and another 137 that will be equitised in 2016-20.
Of the latter, the Government will keep a 65 per cent stake in four firms, 5065 per cent stakes in 27 and less than 50 per cent in the remaining 106.
Some major SOEs will be equitised in this period, like the Vietnam National Coal – Mineral Industries Holding Corp, Vietnam National Chemical Group, Vietnam Posts and Telecommunications Group, and the Vietnam Bank for Agriculture and Rural Development.

6.6% GDP growth forecast
Vietnam’s gross domestic product is expected to grow at 6.6 per cent this year following a drought-induced slowdown in 2016, according to Standard Chartered Bank’s Global Research Briefing.
Strong manufacturing growth and increased construction activity are likely to remain the key growth drivers in 2017.
The report expects the 2017 global GDP growth to remain unchanged at 1.5 per cent and be driven by emerging markets.
“The year 2017 is shaping up to be an exciting but volatile year. The potential reflation of the US economy is fuelling optimism, but we think this is overdone, as tightening financial conditions may stunt growth before fiscal stimulus takes root. Tighter conditions are also likely to unleash further volatility, leading to repricing of risk in many emerging markets,” Marios Maratheftis,the bank’s chief economist, said.