Five of the untraded stocks are on the Hanoi Stock Exchange (HNX), Vietnam’s second main bourse for mid- and smaller- caps, which account for around 10 percent of total listed market cap, according to data from finance portal Vietstock.

The Unlisted Public Companies Market (UPCoM), a mezzanine exchange for unlisted companies with lower disclosure requirements, hosts the remaining 137.

None of the untraded stocks are on the Ho Chi Minh Stock Exchange (HoSE), which accounts for 90 percent of the nation’s listed market cap, and is represented by Vietnam’s benchmark VN-Index.

According to data from brokerages, nearly half of the number of tickers listed on HoSE and HNX, and two-third of stocks on UPCoM, totaling 788 tickers, have an average daily trading volume of less than 10,000 shares per session in the past year.

"Liquidity for some stocks has been this low because they are unable to attract the attention of investors," Le Nhi Nang, head of the representative office of the State Securities Commission in Ho Chi Minh City, said at a recent conference.

"The financial information gap is also a reason why the stock prices of many listed businesses with good fundamentals do not accurately reflect their performance and value," he said.

From an investor’s perspective, Nguyen Hoang Linh, head of research at Vietcombank Fund Management (VCBF) said it was essential that investors are able to research a company thoroughly before investing in their shares.

They need to be able to access financial disclosures from official sources, showing a high level of reliability in business operations, as well as plans to expand business operations. Businesses that do not do well in disclosing their financials will see poorer corporate valuations, he added.

Nguyen Anh Duc, Director of Institutional Client Services at brokerage Saigon Securities Inc., said while larger enterprises have managed to carry out disclosure and investor relations professionally, most small enterprises often do not care, and do not allocate resources for this activity.

To improve information disclosure and investor relations, businesses should set up a separate department specialized for this activity with a clear set of standards. However, because this is a trust-building activity, it cannot be done without a long-term strategy, he added.

According to a report on financial disclosure by the Vietnam Association of Financial Executives (VAFE) published in June, only 329 out of 729 enterprises listed on the Ho Chi Minh Stock Exchange and the Hanoi Stock Exchange, Vietnam’s two main bourses, have fully conformed to all disclosure requirements in a timely manner.

The rest all received warnings or fines for late or erroneous filing of quarterly or biannual financial statements, the report said.

Of those that fully meet standards, 21 are large-cap businesses (market capitalization above VND10 trillion, or $431.52 million), 81 are mid-cap and 227 are small-cap stocks.

Companies with larger market capitalization have better information disclosure management practices, while the worst were companies with "small or very small market capitalization" (below VND1 trillion), VAFE said.

However, conformity with disclosure requirements has improved over last year with a 45.13 percent full compliance rate, up from 36.33 percent, it added.