In response to The Labour, Dr. Dao Quang Thong, Vice President of CIC said that:
CIC has classified 198 listed enterprises in Vietnam’s stock market. Up to August 24, 2007, classified enterprises have been evaluated excellent or at least good, and there have been no one bad. Enterprises listed on HOSE trading floor mostly have larger scales and better operating performance than that of enterprises listed on HASTC trading floor.
On HOSE, there were 55 enterprises ranked AAA, which accounted for 49.5% out of 111 enterprises on this floor. Whereas, on HASTC, there were only 19 enterprises ranked AAA, which made up for 21.8% out of 87 enterprises listed on HASTC.
- Many organizations have evaluated enterprises listed on Vietnamese stock market. Do you think that the ranking results of CIC are comprehensive and precise?
- Some organizations, including foreign financial organizations as well, have assessed some listed enterprises that drew their attention. However, the evaluation was based on criteria set by those organizations themselves, so the results have not been actually comprehensive and objective.
The analysis and ranking results of CIC is comparatively comprehensive and precise for several reasons. First, based on financial statements of the listed enterprises that have been accounted by accounting organizations certificated by the Ministry of Finance and State Securities Committee, the analysis of CIC is more reliable than that of others;
Second, as a funding organization, the Bank has more opportunities to closely approach and grasp the situation of enterprises’ finance, production and business;
Third, CIC is the only organization in Vietnam that has had more than 6 years of providing analysis and ranking results for some administrative organs, credit organizations and others with methodology highly appreciated by international monetary organizations like World Bank, Asian Development Bank, International Monetary Fund and so on;
Finally, the ranking results of CIC were dealt with by automatic software that did not interfered by human beings.
All things considered, I reckon that the analysis and ranking results of CIC is objective and accurate.
- Which criterion is used to make up the list of 20 typical enterprises on the two trading floors?
- CIC and D&B selected 20 outstanding enterprises based on financial criteria of listed companies such as EPS, ROA, ROE, P/E, P/B and P/SR in keeping with credit ranking results with 9 degrees raging from AAA to CCC. From that, CIC and D&B selected 20 enterprises with the most outstanding indexes. In my opinion, this list is objective and truthful.
- Does the ranking results affect to the stock prices of enterprises in the following days?
- The development of Vietnam’s stock market first of all depends on the development of the domestic economy. Moreover, Vietnamese stock market not only operates in its national borders but also connects to international financial market, then the international market will more or less put impacts on Vietnamese market.
The ranking results of CIC and D&B is just an objective information channel for domestic as well as foreign investors refer to when deciding to invest. Relying on the racking results, investors can carefully analyze an enterprise, an industry or a field so as to know the long-term development strategy of the company, then they can come to a decision whether to invest in the enterprise or not.
- How do you anticipate the attitude of enterprises when they know their ranking results?
- According to me, all enterprises want to be highly ranked. Nonetheless, enterprises have to accept the evaluation from CIC. The most important thing that CIC confirms is that the rate of listed enterprises with excellent business performance tending to enjoy sustainable development is higher than that of unlisted ones.
Companies should also use the indexes derived from CIC to better adjust their performance. For example, an enterprise which is ranked well with comparatively effective business performance, stably financial condition but is limited in financial competence will easily be affected by business fluctuation originating from competition.
- Thank you very much!