Remove listing barriers, open capital attraction channels for manufacturing and technology enterprises

Mostly real estate and banking

Sharing with reporters of Cong Thuong Newspaper, Dr. Can Van Luc - Chief Economist of BIDV , and Director of BIDV Training and Research Institute, said: About 60% of capitalization in the Vietnamese stock market belongs to the banking and real estate sectors, while technology and manufacturing enterprises account for a very small proportion.

*Diversifying goods on the stock market is one of the important factors for the market to attract domestic and foreign investment capital. Illustrative photo*

According to Dr. Can Van Luc, this is in contrast to foreign stock markets, where their technology, AI, energy, and strategic industrial sectors account for a very large proportion of capitalization in the stock market. The large proportion of capitalization in the stock market in the banking and real estate sectors also creates an unsustainable stock market.

According to economic experts, the high capitalization of the banking and real estate groups makes the performance of the Vietnamese stock market largely dependent on these two sectors. Banking is a highly cyclical sector, sensitive to interest rates, asset quality and credit policy. As soon as there is a signal of tightening credit room, increasing bad debt or adjusting interest rates, bank stock prices immediately react strongly, pulling the general index down.

Similarly, real estate is directly affected by project legality, cash flow and the bond market. When these factors fluctuate, real estate stocks often fall sharply, creating a spillover effect across the entire market. The heavy dependence on these two sectors makes the VN-Index susceptible to strong fluctuations, reducing the stability and sustainability of the market in the medium and long term.

*It is necessary to facilitate manufacturing and technology enterprises to list on the stock market. Illustrative photo*

No equalization of criteria, creating favorable conditions for businesses

According to experts, the diversity of goods on the stock market will be one of the important factors for the market to attract domestic and foreign investment capital. This is also a factor that helps the stock market achieve its upgrading target. However, according to economic experts, currently, the listing criteria on the stock market are being leveled among businesses. This will cause difficulties for manufacturing and technology businesses when participating in the market.

Regarding this issue, Mr. Nguyen Duc Thong - General Director of SSI Securities Corporation said: One of the criteria that is making it difficult for technology companies to list on the stock exchange is to be profitable within 2 years. This is extremely difficult, because even the world's leading technology companies in the first years of their start-up are the years that need the most capital to focus on research and development (R&D) activities, so they almost all fall into a loss-making situation in these years, so the requirement to be profitable is extremely difficult.

“However, this is a very worthwhile time to invest in technology businesses,” Mr. Nguyen Duc Thong affirmed, adding that if there is a mechanism to support technology companies to attract capital during this period, it will open up very good opportunities for technology businesses to develop.

Regarding manufacturing enterprises, Mr. Nguyen Duc Thong said that the current situation is that large manufacturing companies often do not need capital. Meanwhile, manufacturing enterprises have difficulty accessing capital, so if there is a policy to encourage manufacturing companies with surplus money to invest in other areas, or create a mechanism for manufacturing enterprises in need of capital to attract capital on the stock market.

From another perspective, Mr. Nguyen Duc Thong - General Director of SSI Securities Corporation said: Cash flow into any industry, real estate, banking, or industrial production, technology is valuable. However, to create favorable conditions for industrial production enterprises, technology enterprises to develop, more mechanisms are needed so that industries wishing to develop can access capital more easily.

Regarding these mechanisms, Dr. Can Van Luc said that instead of equalizing the listing criteria for all enterprises, the criteria for manufacturing and technology enterprises should be reduced, so that enterprises have more opportunities to raise capital on the stock market.

The consideration of relaxing some listing conditions, especially for manufacturing enterprises, is expected to create more room to attract quality goods to the stock exchange.

Source: https://congthuong.vn/go-rao-niem-yet-mo-kenh-hut-von-cho-doanh-nghiep-san-xuat-cong-nghe-431158.html