The number of companies conducting initial public offerings (IPOs) and listings recently has been low recently due to an insufficient volume of investors capable of purchasing large stakes and concerns about diluting ownership structure.

Some companies have completed their IPOs, but the period between the payment for shares and their listings has been extended. This extended period, which can be three months or more, without trading and liquidity poses a significant barrier for international financial investors. In reality, some funds even prohibit transactions involving unlisted stocks.

According to the SSC, there is an organic relationship between the presence of large companies and the upgrading of Vietnam's market status.

Supporting and encouraging more large companies to list is one of the SSC's strategies to improve the market rating. Conversely, foreign investors are more likely to enter the market when they see a substantial number of large companies.

Bui Hoang Hai, deputy chairman of the State Securities Commission of Vietnam (SSC)

“From a technical perspective, the IPO process and the listing process are currently separate, leading to a relatively long period between the investment in purchasing shares and the actual listing of the shares, which can be three months or more. This represents a significant barrier for some funds and international investors. Therefore, the SSC is reviewing regulations and plans to amend Decree 155 to integrate the IPO and listing processes. This amendment will facilitate listing almost immediately upon completing an IPO,” said Bui Hoang Hai, deputy chairman of the SSC.

Praising this solution, Le Thi Le Hang, CEO of SSI Asset Management, said, “Shortening the time between these two processes will be a strong incentive for companies to list. Additionally, domestic funds in Vietnam allocate only 10 per cent of their investments to non-listed companies. Even if companies are listed but not on the HSX or HNX, it restricts the investment activities of this group of investors.”

Le Thi Le Hang, CEO of SSI Asset Management

In reality, many large companies that have registered to trade have remained on the Unlisted Public Company Market (UPCoM) board for years without transitioning to a higher exchange.

Regarding this situation, Hai noted, “Part of the issue comes from the companies’ own intentions and also because these companies have not yet met the criteria for transitioning to a listed exchange.”

“For Binh Son Refining and Petrochemical JSC (BSR), the company faces technical issues. According to available information, BSR is working actively, and the technical issues will be resolved in the near future. Regarding the transition from UPCoM to a listed exchange, the initial goal of UPCoM was to serve as a platform for companies that are not yet up to standard, providing a preparatory stage for listing,” he added.

According to the listing conditions on the HSX, BSR meets 8 out of 9 conditions, except for the criterion “no overdue debts exceeding one year”.

The issue stems from a subsidiary of BSR, Central Biofuel JSC, which has overdue debts nearing $45.83 million with several banks and is awaiting proceedings from Quang Ngai People's Court.

“Currently, we are working on a market restructuring project, which includes segments like HSX, HNX, and UPCoM. The SSC is taking steps to reorganise these market segments and allocate companies to appropriate boards,” said Hai. “The reorganisation of companies into market segments will still be conducted based on the voluntary participation of the companies and their suitability, rather than as a mandatory administrative action. Therefore, regardless of how we reorganise, we will ensure the stability of all market segments.”