Equitisation process slows on failed IPOs

Hanoi (VNA) - Equitisation of State-owned enterprises is falling far short
of targets this year.

Only 28 percent, or about 73 out of the 262 State-owned enterprises slated
for privatisation this year had completed the process as of the end of
November, according to the latest Ministry of Finance's report.

This volatility of the market due to the economic crisis is cited as a key
reason for the slowdown.

As a result, initial public offerings (IPOs) from State-owned companies
have been less effective than expected, which has caused reticence in other
firms to do the same.

According to securities experts, the evaluation of enterprises is another
big hurdle for an effective equitisation process. The firms are often being
evaluated at levels higher than their true value, thus decreasing investor
confidence and making the IPOs less attractive to investors.

Analyst Ha Trung Hieu of An Binh Securities said that investors were now
carefully scrutinising the offering price for each IPO, because of too many
losses in their securities investments recently.

"At present, investors are quite experienced with the volatile market.
They can recognise good stocks to invest in. A reasonable price [not at a
low level] will be decisive for a good firm to go public successfully," Hieu
added.
The ministry said the country would have 948 enterprises undergo the
privatisation process in the 2008-10 period, despite the slowing of the
process this year.-Enditem