Hanoi, 18 August 2004 — The Mekong Private Sector Development Facility (MPDF) has just released Paper Number 16 in its series of Private Sector Discussion Papers. Entitled “Expanding Horizons: Equity Finance in Vietnam,” the paper examines the current state and future prospects of equity financing activity in Vietnam.
Equity financing is broadly defined as a method by which companies raise long-term capital through the sale of shares (equity) to investors, rather than through other financing means, such as a bank loan or other debt instruments. The paper explains the current sources of equity financing available on the market in Vietnam--the stock market and venture capital--and analyzes the constraints hindering their growth in recent years.
Recently there have been positive changes to the laws and regulations governing equity financing, which should translate into more vigorous equity financing activity in the years ahead. The paper finds that equity financing can play a useful supporting role to the more common types of corporate financing, such as bank credit. This is particularly true for companies undergoing rapid growth and that require relatively sizable funds for their medium- and long-term investment needs.
The full report can be downloaded from the MPDF website at http://www.mpdf.org. It is also available from IFC/MPDF - Suite 301-304, 63 Ly Thai To, Hanoi, 04-824-7892.
