Vietnamese apparel firms avoid stock market for now
Although Vietnamese apparel company movement toward the stock market is an inevitable trend in a market economy, only 30 businesses of the sector’s total of 6,000 have listed so far.
Many companies also fear their shares would not get fair value if listed now, because the sector faces many challenges.
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| Although Vietnamese apparel company movement toward the stock market is an inevitable trend in a market economy, only 30 businesses of the sector’s total of 6,000 have listed so far. (Photo: dautuchungkhoan.vn) |
Last year was a hard one for the sector, with results much worse expected, including just US$28.3 billion worth of exports, a year-on-year increase of 5.6%.
In addition, the year’s target had been adjusted down from US$31 billion to US$29 billion, after major importers, including the US, the EU and Japan, reduced demand for garment and textile products.
Listed companies did not escape the downturn: Soi The Ky Joint Stock Company saw after-tax profits plummet by 60% to less than US$29 billion (US$1.28 million), Thanh Cong Textile Garment Investment Trading Joint Stock Company’s after-tax profit was down 25% to VND114 billion (US$5.06 million).
This year, the sector is expected to face many challenges as well, including a lack of support from tax policies, since several important trade deals such as the EU-Vietnam Free Trade Agreement and the Trans-Pacific Partnership will not come into effect.
Lastly, competition will only become fiercer, as other countries march ahead thanks to their conducive tax policies and exchange rates. The instability in the EU economy is also expected to have an impact.
