Purify the market, catch the upgrade wave

The effort to purge weak businesses on the stock exchange before the stock market is upgraded is seen as a move to improve the quality of goods and welcome larger, higher-quality businesses to list.

Continuously punishing businesses that violate information disclosure obligations

Over the past year, the State Securities Commission and the Ho Chi Minh City Stock Exchange (HoSE) have continuously penalized many listed and public companies for violating information disclosure obligations to protect the legitimate rights of investors and bondholders. In addition to efforts to penalize companies that violate information disclosure obligations, HoSE has also implemented mandatory delisting of a series of companies that do not meet market requirements, thereby helping to improve the quality of goods on the floor.

Specifically, HoSE has forced the delisting of Hoa Binh Construction Group Joint Stock Company (code HBC) from September 6, 2024, Sao Thai Duong Investment Joint Stock Company (code SJF) from November 1, 2024, Thien Nam Import-Export Trading Joint Stock Company (code TNA) from November 19, 2024, Tan Tao Investment and Industry Joint Stock Company (code ITA) from February 4, 2025... HoSE also warned of the risk of forced delisting of SMC Investment and Trading Joint Stock Company (code SMC) due to losses in the previous 2 years and if losses continue in 2024, it will be forced to delist.

In fact, the enterprises that were forced to delist all had difficult business situations, losses exceeding their charter capital, losses for 3 consecutive years or violated their information disclosure obligations by not publishing audited financial statements for a long time. Therefore, although the HoSE reduced the number of listed enterprises, it still increased the quality of reports on the floor, which invisibly improved the quality of enterprises thanks to the effort to purify enterprises on the floor.

Waiting for big floor transfer deals and market upgrade wave

The market is awaiting many notable floor transfer deals in 2025. In particular, Mr. Michael Hung Nguyen, Deputy General Director of Masan Group Corporation (code MSN) has just shared that the Company continues to plan to transfer the floor from UPCoM to HoSE for Masan Consumer Joint Stock Company (Masan Consumer, code MCH).

This is a step to unlock many values, increase business efficiency, and at the same time help the Company access a wider capital market. The goal is to IPO in 2025, but it depends on market conditions and the Company is making efforts to implement the plan.

Similarly, Dong A Steel Corporation (code GDA) had planned to list on HoSE, but due to difficulties in the steel industry, the listing plan was postponed and temporarily listed on UPCoM. This is a deal worth waiting for in the near future.

With the condition of listing on the HoSE being 2 consecutive years of profit and a minimum return on equity (ROE) of 5%, Ton Dong A has had two consecutive years of profit and its ROE in 2024 will reach 9.2%. The current problem is that the enterprise will choose the right time to carry out the floor transfer procedure when the number of shares is still relatively concentrated compared to companies in the industry (only owning more than 114.69 million shares compared to other enterprises owning from more than 315 million to 620 million shares).

In addition to new deals, listed companies on HoSE are also preparing procedures and personnel to soon publish bilingual information and convert Vietnamese accounting standards (VAS) to International Financial Reporting Standards (IFRS).

At Binh Duong Water and Environment Corporation (Biwase, code BWE), Mr. Nguyen Van Thien, Chairman of the Board of Directors, shared that the Company has a contract to convert accounting standards from VAS to IFRS, has made reports in 2024 and will continue to report bilingually in 2025. This preparation helps the Company to catch the wave of upgrading when more investors will participate in the Vietnamese market.

Based on legal reforms and the implementation of information disclosure obligations of enterprises, Rong Viet Securities Company commented on the upgrade roadmap in 2025 that FTSE Russell has recognized the market reform efforts of the Vietnamese Government and the State Securities Commission.

In particular, Circular 68/2024/TT-BTC has addressed the remaining two criteria required by FTSE Russell. Accordingly, foreign institutional investors are allowed to buy shares without pre-funding. As a result, FTSE Russell can confirm that Vietnam is eligible for an upgrade in the March 2025 review period and officially upgrade in the September 2025 review period.

“If upgraded, the capitalization ratio of Vietnamese stocks in the FTSE Emerging Index basket is expected to reach 0.57% (equivalent to 43/7,593 billion USD). Accordingly, the capital flow allocated to the Vietnamese market can be estimated at 916 million USD, equivalent to 2.2% of the total capitalization value of stocks currently held by foreign investors,” Rong Viet Securities Company estimated.

Therefore, Vietnam's official upgrade is expected to further promote capital flows into Vietnam and be an opportunity for well-prepared businesses to receive additional capital flows from large institutional investors.

Source: https://baodautu.vn/thanh-loc-thi-truong-don-dau-song-nang-hang-d246146.html