Bright Prospects for Investment Banking
*What is your assessment of the opportunities and potential for growth in the investment banking (IB) market in 2024 and beyond?*
**Mr. Nguyen Hoang Tung, Director of Agriseco Southern Branch**: The IB market in Vietnam is growing, and there is still ample room for expansion. Currently, there aren’t as many companies specializing in IB as there are in foreign markets. With Vietnam being a developing country and attracting significant investment from foreign organizations, the demand for capital raising and investment arrangement is rapidly increasing. This dynamic bodes well for the growth potential of the IB market.
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The Vietnamese economy is one of the fastest-growing in the region and globally, and the country’s stock market is classified as a frontier market. However, we are working towards upgrading the stock market from frontier to emerging, which will attract significant capital from foreign investment funds.
Upgrading the market will not only bring opportunities for the Vietnamese stock market and its participants but also enhance the country’s image and investment environment, fostering economic development. Achieving emerging market status will attract substantial capital from foreign funds and invigorate the IB market.
Corporate financial advisory activities related to capital arrangement, public offerings, mergers and acquisitions, or restructuring of enterprises will increase in demand and become more professionally organized. As a result, securities companies can leverage and strengthen their IB activities, contributing to their business performance and the completion of their financial service ecosystem.
ESG is the Key to Success
*In the journey towards green growth, ESG (Environmental, Social, and Governance) is a set of standards for measuring and evaluating the sustainable development of enterprises. How should enterprises approach ESG to attract investment capital?*
– The ESG standards have become a prevalent concept, and it’s no surprise that ESG is becoming a top priority for Vietnamese businesses. Enterprise owners are actively applying and investing in ESG in their operations to attract domestic and foreign investment.
ESG encourages enterprises to operate more responsibly, attract investment from investors, and create sustainable value for investors and society. Currently, the ESG trend is positively impacting the market.
ESG is not just a fad but a decisive factor in the future success and sustainable development of enterprises. To attract investors’ attention, enterprises must integrate ESG considerations into their business strategies and emphasize good governance and transparency.
*What is your evaluation of the role of investor relations (IR) in enterprise development?*
– The IR activities of enterprises play a crucial role in connecting businesses with market participants, including individual and institutional investors and financial institutions. Through IR, information disclosure becomes more timely and transparent, fostering a healthy investment environment and improving the efficiency of IPOs, listings, and share offerings.
When providing IB services to enterprises, securities companies will advise on improving IR effectiveness, thereby maximizing enterprise value. Efficient IR facilitates better access to low-cost capital and serves as a channel for information exchange and feedback from investors on strategies and business results.
Transparent Information for Better Capital Access
*What criteria do buy-side parties, especially investment funds, set for information transparency when researching enterprises to make investment decisions?*
– Buy-side parties, particularly investment funds, establish criteria for information transparency before deploying capital. Enhancing the quality and transparency of information and requiring enterprises to provide detailed and accurate reports on financial statements and risk management in line with international standards improves comparability and reliability. This provides a solid basis for evaluation and decision-making by buy-side parties.
An enterprise is considered transparent when it meets all information disclosure standards, including deadlines, content, a website with up-to-date and accurate company information, and an IR department actively engaging and receiving feedback from investors.
*How are the information disclosure activities and responses to information requests meeting the needs of institutional investors?*
– Listed companies in Vietnam currently communicate with investors through media channels such as the press, websites, and corporate fan pages. Additionally, the IR department plays a vital role in connecting enterprises with market participants. Events like annual general meetings, investor meetings, and interactions with analysts from securities companies or investment funds provide opportunities for the market to access information from enterprises.
While information disclosure has improved, especially for leading enterprises with well-established corporate governance systems, there is still room for enhancement among small and medium-sized enterprises. In some cases, information disclosure is not timely, and the content provided is insufficient, hindering investors’ ability to evaluate and make informed decisions.
More efforts and changes in information disclosure practices are necessary to enhance market transparency, meet investor needs, and contribute to the health and integrity of the stock market.
*Thank you for your insights, Mr. Tung.*
*By The Manh*
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