Vietnam: a road to the securities market.

by Lee Ming-Kwong, Tam Yuen-Man.Thesis (M.B.A.)--Chinese University of Hong Kong, 1997.Includes bibliographical references (leaves 148-152).ABSTRACT --- p.IIITABLE OF CONTENT --- p.VLIST OF ILLUSTRATIONS --- p.IXLIST OF TABLES --- p.XACKNOWLEDGEMENT --- p.XIChapter I. --- INTRODUCTION --- p.1Chapter II. --- COUNTRY PROFILE --- p.3Chapter III. --- VIETNAM MARKET POTENTIAL --- p.4Chapter IV. --- RECENT ECONOMIC DEVELOPMENTS --- p.6Economy --- p.6"The ""Doi Moi ´ح reforms" --- p.61989onward --- p.7Inflation --- p.8A three year low inflation of 4.8% is recorded in 1996 --- p.8Interest Rate --- p.10"Maximum Lending Rate Has Been Cut For the Fourth Time, to 1.5% per month" --- p.10Interest Rate Cuts Will have Minimal Impact on Economy- --- p.11The Paradox of Surplus Capital in a Cash-strapped Economy --- p.12Exchange Rate --- p.12Vietnamese Dong to Depreciate Marginally in 1996 --- p.12Tight Regulations Contributed to the Stable National Currency --- p.13The Dong Has Been Supported by Massive Inflows of Foreign Capital --- p.13Dong is Roughly 25% Overvalued --- p.14Gradual Adjustment of the Dong is Expected in 1997 --- p.14Planning the 2000s --- p.15Chapter V. --- THE EIGHTH PARTY CONGRESS --- p.17Chapter VI. --- STATE OWNED ENTERPRISES (SOEs) REFORM AND RESTRUCTURING --- p.20Liberalization of management --- p.21Forming large strong conglomerates through merging --- p.22Forming conglomerates in strategic areas --- p.23Cutting the fat --- p.24Chapter VII. --- EQUITIZATION OF STATE OWNED ENTERPRISES (SOES) IN VIETNAM --- p.28What is Equitization of State-owned Enterprises (ESE) in Vietnam ？ --- p.28The Equitization process and implementation in Vietnam --- p.29Some good news --- p.30Government Has Stepped Up Equitisation Drive --- p.32A New Decree Aimed to Stimulate Equitization --- p.33Problems of equitization --- p.34New Incentives Should Ease Management's Fears --- p.39Chapter VIII. --- FINANCIAL SYSTEM --- p.41State Bank of Vietnam's Evolving Role --- p.42reserve Requirements not Effectively Used as a Monetary Instrument --- p.42Interbank Domestic Currency Market --- p.42Interbank Foreign Exchange Market --- p.42A Forward Market is Expected to Be Introduced in 1997 --- p.43State Banks Still Dominate the Commercial Bank Sector --- p.44New Policies Are Expected to Help Joint-Stock Banks --- p.46Chapter IX. --- CAPITAL MARKET DEVELOPMENT --- p.47Capital Market Development One of Vietnam 's Priorities --- p.47Money Market - Debt Securities --- p.48T-bills Have Been Issued Since Early 1991 --- p.48New People 's T-bonds Have Been Issued for Individual Investors --- p.49Vietnam's First Dollar Convertible Bonds Were Issued in July 1996 --- p.50International Bond Issue is Unlikely Despite Clearing of Commercial Debt --- p.51Capital Market - Equities Securities --- p.52Patience is Required for a Workable Stock Market --- p.52National Exchange Committee is a Prerequisite for Future Exchange --- p.53Accounting and Auditing Standards to Be Completed in 1998 --- p.54Foreign Assistance Will Speed Up Development of Crucial Elements --- p.54Coffee Shop' Exchange --- p.55Chapter X. --- PRIVATIZATION: FROM EQUITIZATION TO PUBLIC OFFERING --- p.56Factors influencing the selection of privatization methods --- p.56Motivation for privatization --- p.57Financial and social conditions --- p.59Privatization Techniques --- p.62Chapter 1. --- Contracting-out --- p.62Chapter 2. --- Deregulation --- p.63Chapter 3. --- Trade sales --- p.63Chapter 4. --- Management-employee buyouts --- p.64Chapter 5. --- Joint ventures --- p.65Chapter 6. --- Share Offerings --- p.66Preparing enterprises for privatization --- p.68Chapter 1. --- Feasibility assessment --- p.68Chapter 2. --- Preparation stage --- p.68Chapter XI. --- ACCOUNTING AND VALUATION --- p.70Accounting issue --- p.70Valuation issues --- p.72Chapter XII. --- VALUATION OF SOE --- p.74Chapter 1. --- Corporate valuation --- p.74Net Asset Value (NAV) --- p.74Chapter 2. --- Business valuation --- p.76Chapter (a) --- Discounted cash flow --- p.76Chapter (b) --- Price-earnings method --- p.78Chapter 1. --- "Assessing the ""Earnings""" --- p.78Chapter 2. --- Setting the multiple (P/E ratio) --- p.79Chapter 3. --- Special Consideration --- p.79Chapter 3. --- Composite basis valuation --- p.80Difficulties in emerging market valuation --- p.80Absent of open capital market --- p.81Property or land use rights --- p.81Chapter XIII. --- S PRICE --- p.82Chapter 1. --- Price in Flotations --- p.82Chapter 2. --- Consideration for pricing the SOEs --- p.83Chapter XIV. --- PRIVATIZATION-A REFERENCE TO OTHER COUNTRIES --- p.84United Kingdom --- p.86Privatization --- p.86Chapter 1. --- Which companies to privatize? --- p.86Chapter 2. --- Pre-privatization restructuring --- p.87Chapter 3. --- The role of the capital markets --- p.87Chapter 4. --- The role of Foreign direct investment --- p.89Chapter 5. --- Methods of Privatization --- p.89France --- p.91The objectives of French privatizations: --- p.91Privatization --- p.92Chapter 1. --- Pre-privatization restructuring --- p.92Chapter 2. --- The role of capital markets --- p.92Chapter 3. --- The role of foreign direct investment --- p.93Chapter 4. --- Method of privatization --- p.94Chapter 5. --- Accounting implications of privatization --- p.95Korea --- p.96Objectives of privatization --- p.96From 1968 to the early 1980s --- p.97The 1987privatization programme --- p.97The new privatization policy in 1993 --- p.98The role of foreign direct investment --- p.99Thailand --- p.100Objectives --- p.100Privatization --- p.100Chapter 1. --- Which companies to privatize? --- p.100Chapter 2. --- Pre-privatization enterprise restructuring --- p.101Chapter 3. --- The role of the capital market --- p.101Chapter 4. --- The role of foreign direct investment --- p.102Chapter 5. --- Methods of privatization --- p.103Chapter XV. --- CHINA'S EXPERIENCE --- p.104Reform of State-owned Enterprises in China --- p.104Development of China Securities Market --- p.106China's Shareholding System --- p.109Primary types of shares in Chinese shareholding enterprises --- p.109Chapter XVI. --- DISCUSSION --- p.111Going Public: advantage and disadvantage --- p.111vietnaM'S CONCERN --- p.114Chapter 1. --- A stock market or a securities market --- p.114Chapter 2. --- The Primary Market --- p.115Market participants and intermediaries --- p.115Market Commodities --- p.118Chapter 3. --- The secondary market --- p.120The Stock Exchange --- p.120Stock exchange ownership --- p.121Chapter 4. --- Dealing Mechanism --- p.123Electronic dealing and trading system --- p.126Chapter 5. --- Settlement and Clearing --- p.128Chapter 6. --- Legal framework and supervision --- p.129Chapter 7. --- Foreign Participation --- p.131Chapter XVII. --- CONCLUSION --- p.132APPENDIX 1 --- p.134APPENDIX 2 --- p.136APPENDIX 3 --- p.137APPENDIX 4 --- p.138APPENDIX 5 --- p.139APPENDIX 6 --- p.143APPENDIX 7 --- p.144APPENDIX 8 --- p.145APPENDIX 9 --- p.146APPENDIX 10 --- p.147BIBLIOGRAPHY --- p.14