List of Privae Equity Firms by luv15040


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									Public Disclosure Authorized

                               THE BUSINESS INFORMATION CENTER AT THE VIETNAM CHAMBER OF COMMERCE AND INDUSTRY                                                                   __                        _

                                     THE STOCK MARKET IN VIETNAM                                                                              matgapblizafof23%                of
                                                                                                                                                                               GDP     2i-,
                                                               1) 1      ~~~~~~~~~~~~~~~and
                                                                           a. {1.          l1
                                     Development Challenges ~~~~~~~~~~~appeai10-1S% 2010,Howaver ofsteps
                                                                                                        some the
                                                                               regulaions and implementaton
                                                                              tobe incowsstent with thi stralegy' For
                                    The  development of capital markets is apriorty on the governnt of Vietnam's economic example.                to mtsi
                                                                                                                                         accordingthe recent   rulation
                                                                 at                                                                                    01
                                    agenda. In aspeech made the National Workshop on Four-Year Implementation of the on equiization (Direcbve datedJanuary
                                     Enterprise Law InNovember 2003,                                                                           shall            at
                                                                        Prime Minister Phan Van Khai stressed the Importance of 2001. the State continue tohold least   a
                                    developing and stabiling the country's various mafkts, inCluding capital matets. in order 51%stake in equifized SOEsthat Iatve
                                    to create a positive environment for businesses to grow. thatmeeting, representativespof
Public Disclosure Authorized

                                                                                              In                                reti      captl ts feglon fr ad are
                                     banks articulated that since most bank deposits are short-term, thei rmain     business is pr.DOOSt EsUnerartisaregulation. 2
                                                                                                                                                           for nlby
                                     provision of short-term credit they urged companies to consider the tssuance ot bends and 2hem s esnery cases
                                                                                                                                                 sew    whereitbe pbyvate
                                     stocks as a better altematve for raising nedium- and long-term finance. This bullefin sector canheo ihe rnajority     shareholder in
                                    focuses epecificaty on obstacles facing th stock market and public share issues inVietnanm large equitied SOEs.

                                                                                                                                                        Small scale and low eval transparency
                                          Limited quantity and quality of shares fbr minorly shareholders; lack of standard among Vietnamese enterprises
                                    listed on the Securites Transaction Center reuirements on financial disclosure and                                   Private Vietnamese                  have
                                                                                                                                                                                enterpdses only
                                    (STC)                                                 inftomalon tr3irsparency; unclear stipulalions begur              toddvelopoverthelastdecade andsince
                                          Vienars firstandonlysock market             has on tax obligatons for foreign Investors;                        in
                                                                                                                                                    2000 parti r. Most                   firts
                                                                                                                                                                                 pivates arethns
                                    been operatonalt ornme(eban three        years. wth   limitabons    placed or the percentagetotal     of              or                      and tend
                                                                                                                                                    smvall nicro-enserprites tbe ret in
                                    thenumber ol                                                    that
                                                        lised fnns gradually increasing shames a foreign investor may hod in a an isnoreal.                        household     nafrer. In addition,
                                    fromte tnlo over thattime period. size   The       of local firm; etc.                                                               firms
                                                                                                                                                    Vieinamese private ohsn rnaintain           opaque
                                    themataet,       however,sItiextremely in
                                                                 is              smta                                                               rnansoil acouts anddisplay lw lovelof
                                    comparison size the
                                                     lothe         of economy its and          Insufficiently regulated intormal market coWate transparuocy, is due partly       This                 to
                                    demand ng-terr
                                                for                      All
                                                                  capitatl of thelisted lslargerthanthe oflWal narket                               companies'    detberale intenilons, habits and
                                    firts isVietam arerelatsel small comtpanies, Pubto share                   issues co ucted       outside the inadequate traiing: but       is aresult      otlack of
                                    andas sxh eir shame not particaledySiT arequite                                                    is
                                                                                                           aive-; however, Ihenrero leat            regulatory                            of
                                                                                                                                                                oversight onstandardsinfenmtre
                                    atlraclive to potential                dae. lare tramewok regulaing these
                                                              investo. To sno                                             aciities atpresenL diFcowre,wuditinandacoentiog.Forexneplpi
                                    ot high profile           have                        For                             are
                                                       SOEs sought or beowrgiven every sled finr, theTe aneslsrated 30 itisestitta                                  latonrlyt1520%ofranpaniesarry
                                    approval issue cbl      p       sharms list onthe finrs raising ands public
                                                                          and                                     from         inverstos in the                             as
                                                                                                                                                    outftanciareportng required ErPrpise  by
                                    STC. The number large,     of       domestc pOvate infrmral, orover-tve-cunter (OTC)                                  The
                                                                                                                                     tmarket. Law& tds ofadequale
                                                                                                                                                Of                                 accounting.  auditng
                                    cofpuniesthatrneetthelistivgciteriaisalsoshI          the          1,000                    been
                                                                                              nuarly SOtEsut have oquWizedand transparency                                standards    constnains    the
Public Disclosure Authorized

                                                               there            no
                                    limited.Inaddision. have been iitial todate, less than arecurrently osn     3%                 listed the develpreent ofequity                              as
                                                                                                                                                                            fitnaning. as well other
                                    pubic offerigs 11POs(raise    to      morey todatl: SiTC; bereasonably assumed shares torrns
                                                                                                 1ican                               that                 of            the            sector,
                                                                                                                                                             turing for corporate since the
                                    onlyexisting                hove
                                                       shares hoen listed. Asa inmany equiizedfirTts are being traded We doks OM ftdeinvestor
                                                                                                                                           on            and                      hecomenssignttcattly
                                    consequence, Ihe marhet is coesidered                 uvotficialmarket.                                         greater
                                    unaltractiveasaninvestrtensavenue,relativeto               Indeveloped                    the
                                                                                                                 economies, OTC           mtarkel
                                                            and                by
                                    other instrurnents opportunities,many can be much                               than
                                                                                                           larger Ihe centralized            stock
                                    investors,                                                       at                    of
                                                                                            arke,L leastin termns lhe rwnober                    ot

                                    tnstltutinal investors
                                                                                          companies      participating. those
                                          Lack of active participation by thereare[awsregulalitglhesalesandtradingof
                                                                                                   on OTC are
                                                                                          shares rhe that aimed protecting i 5     at
                                                                                                                                                       f l-_  NO!           A

                                               love                              can                 This
                                          The lenl of actity intheSTC also investors. isnotyet thecase in Vietnam.
                                    besenWbuted                       ont
                                                     toweakniesses demand           ride. andasarensoir, isagenkeral
                                                                                                             there                concern     frmm
                                     Mostinvestors the STCare Individuals, both                 government      regulatos andtests that        this
                                    seeking rsakegains through                short-tern informnalmarkaetrunsahighertisksGfallingvictim
                                    speculation. thanlong-term               investmentfinanciai      scandals.      Sucha scenaro could
                                    strategies. lck o0            robustdemand listed dramage
                                                                                tor                  investor confidence es a whole, and
                                    shares has     contibutedtolher arkets instability,          an
                                                                                          hnse indirect,        adverse           on
                                                                                                                         Impact theinfant
                                    and   consequeny, has                     fimrms
                                                                 detered some (ramr SiTC
                                      tiinronthe    STG.
                                          Instituional investors, both domestic and            policies and legal framework capStal  tor
                                    toretgn, have generally nol beenactive in market development are Inconsistent and
                                    purchasing shares of STC-listed firmsfor a Inadequate
                                    number of reasons beyond relative      the                 Thegoverment isdetermnrsed             todevelop
                                    snaltractiveneos at the listed shares~ Viutrnais securius mnarket,                     aseyidencedthe   by
                                    themselves, includinHg:          vaduos regulatory recentiy-promlgated Decree                163120031QD-
                                    inadequacies, including inssfficienl protecionl TTg,                 6
                                                                                                 dated August                       sels
                                                                                                                     2tt3, whick out an
losure Authorized

                                     fii ty'rn &
                                            b      rrru
                                                                       wv. Mseoes  ervrs e uoi 'F,8ilt
                                                                                   ow5iStv n3 ee"vusvat non Y                    oc.t__s.

the shares

 ithe                     securities pledgedcollateral atcomnirercial
          dofars topurchase               ars                    hurktr.
raise         Mr.tyXvarfHai- Gen           A
                                eeralDwtair.siaComeratjoirrt~S toorakfik
new       Secuitis Company  (ACRS)
juleso     * PJC is~ a orant-stock           comnpany, seven
                                                        withl        irrjor instlulional
 end       sharelroldrs Petrolinmen,    Vielcoenbav.   Venare,VSC,            Have
                                                                    Matexirm, antd
rrg in     ATCompany        holding of the epasty, thousands of individual
                                      80%                   and
boat                                                 20%
           sharelroldrs holding remaining ofshares. eightyearof
                                    fire                             After
   re-                                        anhd
           opeation, our paidin capital retained            earnings have  reache250
 neaw      billion deng, almost Stimes tthe            paid-in
                                               originval capital sf55 billkien indong
noise      199&Ateurrecent shareholders meetng, weagreed               infprnciplethata
           company as many           individual lvivasos like       must
                                                              PRICO lIsteventualy.
twist            We don't intend.howevert                    inOre
                                             Islist avy ose nearfmlure. are   There
It. as     mrany             fo                   Ohe
                   reasone this nol oust unfavorble areathe                conditions at
 ankd prsent. The          stoitvatketisnVielnamnis verynrewto investors, but to  alto
mceo. fir govenment regtulators. result, policies
                                            Asa           their              to
                                                                       momn bemrore
firms responsive to mnarket                             we
                                        tlunictuatJons:don't reallyse that the
Ilwith govemment hasa riear long-termr                        and
                                                    direction thusarenotconfident
      m enough proceed, tAr even
                     to                          bigger issue is the abtity to manage
       ant inforeratian in Vietnanrese    comparies isstillvery       anid as
                                                                 weak there atack
           rof oroatlegoveenanco toput                                For
                                              suchasystemsin place.
hozed do not propedyrnrnae theinfomado thatis publicized tyy abOUt         and       OUF
                      Oiere            ask
      'ig cornpany. issalhigh ofdamage toaor reputafiov ifthepublic                orms
meet                  based                         is~
           itsopinion oninformation that incomplete orinaccurate.                      -
mited                                                    tao
                Mr. TranAghia Vto -Gseoafinec4DPat mavIstrraurarrc
           StockrCompany      (PSCO)
nities                                     *Thesizeofthemarethenestog w. Right
550)                                       vpovcwhenvacomepanyends to  movey, goe
retis                           abank                    is
                                        biecauise there noother     alterative.
 new                            The market   iwlinhost lMehrirbsgcompanies
 ithis                               need
                                that capital and                         until
                                                       investors togethrer it
prico                           is big enough hasenough
                                                  an                investment
ltorn                           options. Thegoverment needls toe      push
         velof                      ~~~~~~growing
                                         Ore oflireofficil stock      market.  I
          the                       ~~~~~~have                  todoso.
                                      Oiree recommnendations One,
         iota                       ~~~~~~the
                                     govemirrenrt strongly encourage
ouvt                                         to
                                companiesliston theatocl market;           two,
their                                                       to
                                allowjoint-stock banks list; and Orree,
 For                                        the
          conrduct equtiichors through stockmrarket All of Ores
nsof      measures be dorreifthegovemment isdetermirsedenogh.
            Mr.      ScoveiDirkector, Capita
               Dominic                Dragn             lnvestmsentFund

sparency among

nWe syntsmn,'andlose outon             tong-tenre                   should
                                                         Companies have
 boOr stategic andtong-term rotier therchasing inonediats  atiBr          gains.
ever, Tiake. seansle a cuompanry ite airsofVretamhs
               for                                                larget privae
 sstD     oterneuafrrj itssabsea h aetnea orrnn
etie     like       aend Phng, btA
             EpoD Mirnd                                       t1has collapsed.
                                             kwcocorrparries, not
 able Rather groun          steaft.t bymairtinirngaoorsistent buslees stratey ini
  end Osnimasufacdasetor.,buading asA" nanumbaradandgoodvelpuiaton
hi to         cesvahaLietravogfaeyeeover
I,bu                               of
         Depaltenet. SltaiBaak Watnam i      (SW
      WigS Wehave      suismilled           draft      48
                                 arevised Decre tothegevemment for
                     One        thee
 they approval. ofOre mainrvisions inlthedraft istoreqejire joint-
V,                                        to         that more
         stoccompanies seltng shame thepubtic have OneSStliles
 aver          of
         dong equity andover50 sharehoders to comply withthe same
         disclosure reqfiuremlents            of
                                     as those listedfirio's. Thiswill ensure
         faireneussin            disclosure.
artty,      Mr.Tr ain Dung Dep*t Diretor, Office theState
                                 -                        of         Securitis
gOrhe Corerelslei(SSO)
                                                                                                         iriewpoints I

                                             Gov1ernment's policy and related legal framework

                           *I would say lhat the government does not         sell4 ofo   shares to ouside investors, whid attracted attenion from
                           have a clear strategy in developing               many institutional invests, However, ithegovermen subsequently
                          V_etnam's   stock market. The stock market         apped only 20% of shares to be sokt outsasiinventorss            wih
                           should be a plae forlarge corporations thai               that
                                                                             meavst the company i effectively still owreed the State. The
                           have ability to buffer market volablity better    goverrement  needs to be mucirmoreflexible in he amount of shares
                          than small firms and can offer inveslors a         retains in equtized SOEs in order to draw morfe institutional investors
                           better return on irresiment than banks            Ito the market. The stock market needs new momenum, and the
                           savings rates as these are the two main          govenment can help create this new moroentur by allowing large
                           expectations held by stock market investors-      SOEs to be equi        and lised on the sck market without retaininlg
                           At present all listedfirms are small andthe      toomuch owneip of Ihem.
stock market just a playing field for a few small and mediumenterpnses          Mr Nguyen S         Tuan- Deputy Director Bao Val iveslriant
Itthe Vietnamese stockmvarket     were to coliapse, therewouldbe norea gelh
effecton the economy, buit would be a very heavy blow to investor
confidence. Meintaininginvestorconfidenceis key lo economic stability.      0 Decree 48 [which   governs stock maret ac ity in Vietnam] Contains
and its very hard to regainonce itsbeen bst                                 many stpulalions that are no longer appropriate and lhus need pompt
     SOEs in Vietnamcontinue to submit invensnet plans to the               resinon. For exampte.under the decree, investors cannot pledge
govmernevtforlundingtromthestatebudget.ortoseeklong-termloans               shares of listed hrms as colalatral 10 borrow money frm banks;
kom state-owned commercial banks. However.iti very clear Urt the            however savingsaccounts orntherproductssucheasbondsand bits)
commercal banking system cannol. and should not be the mainsource           can be pledged as collateral for a bank loan. This deady does net
oenedium and long-tenr tcans. As long as the government continues to        encourage investors to buy stock in comp iesn
provde low-risk, subsidized toans,SOEs wdI have no reason to seeR               Mr W Dsong Kien - Chworman Gvnea Dl trecs Hai phong
capital trough eitherstock or bondissuance. The govervment coud             Paperjoif Stock Company (APACO)
leam soes lessons fromthe expedence of Chia in devetoping itsstock
market;over 80% of listed firmss Chine are largeSOEs. Their stok
                                    in                                      0 The Ministryof Fiance alws foreign investors to open invesnment
market isn't seen justas ti place list equilized companies: rather, is
                                     to                             it      or depost acounts al any securities firma commercial bank,while
used byboh SOEs and private companies actively raise tends for nsrw         the State Bankhas foreign exchange control mgulalnos ftr securites
tnvestments or expansions. As a result, Chines stock mzarket        has     eansactions on the STCwhich only allow foeign investors to open
developedquite qui intensolsize, ndatpresent,iequitestaNe.                  accounts at three designated custody banks ton foreign investors
     Dr. Le XUaMNghia - Ordotr Banking Strategy Devaetpment                 IHSBC, Deustche Bank and Standard Chatered Banrk. These
Deprfinrrnt StateBanko Vietnam         (SBV                                 inconsistent regulations adversely affect inveslor onfidence to some
                          a The Vteinamese financial manket as                  Mr Ly Xasn Hai - Director Asia Commercil Joint Stock Bank

          a}   _
                          segmentedand not propedy coordinated.
                          The money market is under the supervison ot
                          the SteBankithe insuranc. arketls under
                                                                            a                              j

                                                                            0 appropfate. hbt the imptlementation

                            _ IhcMdinisy
                                     of Finance, equitizafoisunder          meures seeminappropriateaard it nay
                          the National
                                     Committee forSOE Rters, the            be if or 15 years beonlewe see the
                          securities market is under SSC,etc. We
                                                   the                      negativeeffects. SOEsarecurensybeing
                          believe that there shoud be one ageny at          split into smelter pieces fbr equitizaeon.
                          the national tevel that regulates and             whb is restilUngin the creation of tiny
                          supervises all financial market activity. The     companins thal do not have a cre
govermmenthas askedt   hMinistryotPlanningand Investmenltocreate            business. If we keep doing it Uris way I
a master plan for the developnte of thehrancial markets in Vietnam.         donr see how we will ever be able to
which aimas centrakize   supervision of fnandal markets at the macno        equitize large SOEs suchas Petrolimex or
level andfoster beaer coordination between retavant line minisetfes  as     the Vietnam Steel Corporation. We should team lessons from how
theydotheirownplanning. Webetievethisisimportantandnecessary.               oher countries have conducted equitizatons; when England
andhope the SOCwill be given an oppontnity to play a large rolein           prvalied BPOil Corporation, tr example. rther than spliting it into
thisprocess.                                                                smaller pieces, the entire corporation was privatzed by gradually
     Mr. iran vitn Dung - Deputy Director OftIce oft Slate Secutes                                ot
                                                                            I easing the amount shares sold to privateinvestors.
CoonnssionfSSCJ                                                                  To have a iear stock mtarkel Ihe government needs to stop
                                                                            setting up sew SOEs equinize  SOEs through the stockmarket, and set
* The Slate still unnecessarily hbtds major stakes in equitzed              upnewpint-stock companiesthroughlPsonthenstockmarket.
companies. and this diuappoints many            .s
                                           toes The equitDation o0             Mr Tran ghia Ith- GereratDrrector PeltoDmex
                         dairy] in an example. The initial plan was to
Vinamilk Itoelnams lamrest                                                  Sto Corroany (PJICO)
istitutional investors
slor,    and junt one rore fund that was recently licensed the Vwstnam
Lina     Opportunilies Fund.Thereae two mar diffIculies fcing Investmenl
in lo                        One
         funds in Vietnam. isa larcof domesic instibutional         innestors. as
cafe     there is only one locat
                               lfnandal insfituhcon  specialong inraising funds
  Ihe    from individual investors toivest inshares of Vietnamese comrnpanies.
 and     Twois a shortape of businesses ofadequate size orinvesrtent funds to
 ars,     invest in. Most Vienamsese businesses areeither
                                        pnvate                        household
lve      enierpdses or limited-liability companies - both these ypes of
 ljust    businesses aretoo nsky investors, and
                                    for                besides, thelaw does   not
!tax     allow it We areondy    allowed Io invesl injeint-stck companies. whIch
is in                        or
         accounts for20% pivale businesses a small porton of Vielearfs
icha      privatesector.
iucr           Mr,DomnlsicScden-    Difrefc DragonCapialtnveslment Fond
   ihe    * Regarding measures tDfacilitalt demad for stocks. the SSC has
 rar3t    proposed anumber of investmenl incentive schemes ta the Ministry of
their     Finance, inluding waiving corporate income tax for mulual inveutmenl
 and     funds. These area kind of inveslment fund thatraise money from
         individuals toinvest incorporale shares. We tohold worktishops       in
'net     different provinces and ciies wfit high population IDintroduce theslock
         market and thereby raise pubtc awareness, in order to stimulats
         demard anong indvidisal investors.
lain.          1 Traw Dung -Deputy Drector Offie of lher
                        Ven                                       State Secereies
snts,     Comrssil (ss5)

sing                                                  Ifs
          unoffical market has aboul200.000 investoes. fair to say that the
inoa                                                  and
          unofficial market in Vielnam is notsmall, currenly. it isnot
 and      egulated. Inother            there
                             countries, arelaws protecting Investors. which
nall      reqsire that if a ornpany has rwe thana specifc numrber        of
 Idin    shareholders, frexample 20to 30 lhatcompary a r  st      wih alaw
gted-        is        the      as                               only
         that really sarne asecurities law.This law exists not inthe
their     United                  in
                 States, butalso rnosl other Asian               s
                                                   countries suckh Taiwen,
  low     Hono and                So
                Kong, China. Iwould say this unofficial market arisk
                                              that                  is
is of    toVietnam   because itisunrepulaled.
r3ely                      Scriven
              Mr Domnaic -Diector, DcaonCapadlaifvestntFundt
 k to
inies            SSC                 to        the
         * lThe hasplans rminirnruesize thisunofficiala                mrarketby
nore     seeing up anotler centalized securiies trading        center fr smanaer
dace     companies legal
                      witn                            dung. There are some
                                  capitl above 5billton                     who
they                                        the                 But
         feel we should establish an ver counter market. theprorlem            is
         that wecan only have official marknet have
                                  an       OTC        ifwe       'marketmakers
sent      ready b active inIhis
               to                           and                          there
                                      market, who are willing toboy when is
         seaing           and
                demarn, tosell when isbuyingIhere                 In
                                                         dernand.oarview,    this
         isnot yet feasible at this tOme, wehave lans revisil this issue
                                         but            to               around

ughf        Mr.Traen Ouag
                        -Deputy Direcor, Ofice of(the Stat Securites
 the      omrmine (SSG)

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