Niêm yết chéo chứng khoán trên thị trường quốc tế và giải pháp cho việt nam tt tiếng anh

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STATE BANK OF VIETNAM

MINISTRY OF EDUCATION
AND TRAINING

BANKING ACADEMY OF VIETNAM
-----------------------------

DUONG NGAN HA

CROSS-LISTING OF SECURITIES ON
INTERNATIONAL MARKET AND SOLUTIONS
FOR VIETNAM

Major: Finance - Banking
Code number : 9.34.02.01

SUMMARY OF PHD THESIS

HA NOI- 2019


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STATE BANK OF VIETNAM

MINISTRY OF EDUCATION
AND TRAINING

BANKING ACADEMY OF VIETNAM
---------------------------------

DUONG NGAN HA

CROSS-LISTING OF SECURITIES ON INTERNATIONAL
MARKET AND SOLUTIONS FOR VIETNAM
Major: Finance - Banking
Code number : 9.34.02.01

SUMMARY OF PHD THESIS

Supervisors : 1. Assoc. Prof. Dr. NGUYEN THANH PHUONG
2. Dr. NGUYEN SON

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Referee 1: _________________________

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Referee 2: _________________________

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Referee 3: _________________________

HA NOI- 2019

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INTRODUCTION
1. The necessity of the research
Cross-listing is one of the raising capital methods that many enterprises have chosen
in recent years to seek capital from outside. Foreign listing has been known since the 1980s
in major stock markets such as the US market and Europe market. Currently, the number of
foreign listed companies is increasing, showing the advantages of cross-listing.
In Vietnam stock market, from 2006, a number of listed companies have approved
the plan of offering and listing share at international stock exchanges to raise capital.
However, there were very few successful businesses. In addition, the increasing demand
for capital mobilization coupled with the growth of the number of listed firms makes it to
access difficultly capital in the domestic market. Cross-listing is considered as a solution
to help businesses access foreign capital.
With the goal of upgrading the stock market to emerging markets, the regulator
has put forward many measures to improve the market size and operational rules in line
with international standards. Cross-listing brings many benefits to listed companies as
well as the domestic stock market. Therefore, promoting foreign listing activities should
be considered as a solution to help the stock market soon achieve the upgrade target.
Up to now, there has not been a comprehensive study of cross-listing in the
international market of Vietnamese enterprises. Most studies only briefly mention issues such
as motivations and problems of cross-listing without comprehensive research on the theoretical
basis, empirical experience and current state cross-listing of Vietnamese companies.
Therefore, encouraging cross-listing of Vietnamese enterprises will help
businesses have more choices of raising capital methods, improve their operation and
achieve the goal of stock market development in current period. However, the question is
which factors affect the decision of cross-listing of Vietnamese enterprises? What are
constraints and difficulties that businesses encounter when implementing cross-listing?
How is ability to cross-list in the global market of Vietnamese companies? I choose the
topic “Cross-listing securities on international markets and solutions for Vietnam”

as doctoral dissertation title. The thesis will deal to all these above questions.
2. Literature review
2.1. Foreign researches
2.1.1. Theory of cross-listing
The Market Segmentation Theory


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The Investor Recognition Theory/ The Visibility Theory
The Liquidity Theory
The Legal Bonding Hypothesis
The Proximity Preference Theory
The Business Strategy Theory
2.1.2 Empirical research
Motivation of cross-listing
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Access to international capital markets (Reese and Weisbach (2002), Doidge et al
(2004), Hail and Leuz (2009)).
Improve corporate governance, transparent information disclosure (Coffee (1999,
2002), Stulz (1999), King and Seagal (2004)).
Improve the visibility in the international market (Merton (1987), Baker et al.
(2002)).
Improve stock liquidity (Amidud and Mendelson (1986), Karolyi (1998)).

Factors influence cross-listing decisions
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-

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Characteristic of firms factors including firm size, profitability (Saudagaran
(1998), Pagano (2002), Otavio et al (2005), Claessens and Schmukler (2007)),
business stratergy (Bancel and Mitto (2001), King and Mittoo (2007)), sales
growth (Caglio et al. (2011)), ownership structure (Doidge et al (2006), Leuz and
Oberholzer-Gee (2006)), industry (Miller et al. (2003), Doidge et al. (2004)).
Factors belonging to the host stock market including market size (Claessens and
Schmukler (2007)), securities law system (Stulz, 2008) and cultural gap
(Sarkissian and Schill (2004), Dodd and Fort (2016)).
Factors belonging to the domestic stock market including the development of the
economy (Classens et al. (2007), Caglio et al. (2011)), the segmentation of the
domestic capital market (Karolyi, 2004).

2.2. Domestic researches
At the end of 2019, there were very few direct and comprehensive studies on
cross-listing of Vietnamese enterprises. Ta Thanh Binh 92008) approached to complete
the legal framework on foreign listing of Vietnamese firms on the international market.
Tran Thi Thuy Linh (2007) mentioned indirectly to cross-listing in her Roadmap for
connection between Vietnam Stock Exchange and Singapore Stock Exchange. In the
same research line, Tran Quang Phu (2012) suggested that cross-listing likes as solution


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which integrate Vietnam Stock market into ASEAN stock market. Nguyen Thi Tam
(2010), Le et al. (2017) identified in their studies that determines influence the decision to
select the host market by survey and analysis financial factors of firms.
It can be seen that the research directly related to the topic of my thesis only has

the study of PhD. Tran Thanh Binh in 2008 but is not in line of my research direction.
Therefore, the research gap for cross-listing in Vietnam need to be considered: the
comprehensive theoretical framework for cross-listing as well as research on country
experiences and lessons related to cross-list. Since then, I go into depth analysis of crosslisting’s ability and opportunities of Vietnamese enterprises in the current period. From
then on, I evaluate the advantages and disadvantages of listing oversea for listed firms of
Vietnam. Based on research results, I propose various solutions to promote cross-listing
of Vietnamese enterprises.
3. Research objective
The dissertation will focus on the main objective: Promote cross-listing in the
international market of Vietnamese enterprises.
Based on the main research objectives, the thesis focuses on the following
research tasks:
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Systematize the theoretical framework of cross-listing
Analyzing the ability to cross-list and to meet cross-listing conditions of
Vietnamese listed companies in various international Stock Exchanges.
Identify groups of companies that best meet cross-listing conditions of
international stock exchanges though out estimating the impact of factors on crosslisting’s ability at Singapore Stock Exchange.
Proposing solutions to promote cross-listing in Vietnam in the near future.

4. Research subject and scope
- The dissertation focuses on cross-listing of securities on the international market.
- Scope of research on space: The dissertation focuses on listed companies on Ho Chi
Minh Stock Exchange. The Singapore Stock Exchange is the host market of Vietnamese
listed firm cross-listing plans. This selection is based on the suitability of market size,
cultural similarity, ability to meet listing conditions as well as the demand and choices of
business managers.

- Scope of time research: 2018 is selected to compare characteristic of listed firms with
ability of meeting listing conditions at SGX. Additionally, I estimate the impact of


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financial factors on the ability that Vietnamese listed firms meet listing conditions of
SGX during the period from 2014 to 2018.
5. Research questions
The dissertation focuses on three questions:
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How is the cross-listing ability of listed companies in Vietnam?
What is the cross-listing demand and how does the cross-listing meet the SGX
listing conditions of Vietnamese listed companies?
What factors affect cross-listing’s ability to meet listing conditions of listed firms
in Vietnam?

6. Research methods
The dissertation will use practical and theoretical research methods including analysis
and theoretical synthesis, survey investigation methods, comparative and quantitative
methods through Logistic and Cox Hazards models.
7. The Structure of the dissertation
The dissertation is structured into four chapters:
Chapter 1: Theoretical basis of cross-listing securities on the international market
Chapter 2: Experience of cross-listing securities on international market and lessons for
Vietnam
Chapter 3: The cross-listing ability on the international market of Vietnamese enterprise
Chapter 4: Solution to promote cross-listing activities on the international markets for
Vietnamese enterprises.

8. New contributions of the dissertation
The new academic, theoretical contributions: The dissertation has systematized the
theoretical basic for cross-listing activities including: concept, characteristic of crosslisting, implementation method, conditions, positive impacts and negative impacts, the
factor impact on cross-listing decision. Based on theoretical basic, I give various factors
that influence on cross-listing ability of listed firms.
The new practical contributions: Firstly, the dissertation has found four experience
lessons when implementing cross-listing for Vietnamese listed firms. Secondly, the thesis
has comprehensively analyzed the level of meeting the conditions of cross-listing of
Vietnamese enterprises at the present time (2018) in various major host stock exchanges.
Through surveys of business managers, shareholders and securities companies, the thesis


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has determined the cross-listing acceptance of enterprises. Thirdly, the dissertation has
assessed the influence of factors of firm characteristics on the ability to meet the initial
listing requirements at SGX. Fourthly, based on research results and market development
orientation, the thesis proposes solutions for two business entities and management
agencies. The proposal includes specific solution for entities and the Roadmap for
implementing cross-listing in the near future.

CHAPTER 1: THEORETICAL BASIS OF CROSS-LISTING SECURITIES ON
THE INTERNATIONAL MARKET
1.1. Concept of cross-listing securities on international markets
1.1.1. Concept of listing
The concept of listing securities is explained in Clause 17, Article 6 of the Vietnamese
Securities Law: “Listing of securities means putting securities eligible for trading at the
Stock Exchange” or “Listing is the listing of eligible securities to be traded at Stock
Exchange” (NT. Phuong, 2018).
1.1.2. Cross-listing securities on the international market

1.1.2.1. Foreign listing
Listing of securities on the international market is when a company lists its stock
on foreign stock exchange other than the domestic stock exchange (Arauner, 1996).
1.1.2.2. Cross-listing
Cross-listing is understood as a listing activity of a company (having made its first
listing at domestic stock exchange) at one or many foreign stock exchanges.
Cross-listing is also called secondary listing or dual-listing.
1.2. Cross-listed securities
1.2.1. Common Stocks
Cross-listing can be done through the initial public offering in the domestic market
and then listing on foreign markets (after or at the same time with the domestic listing) or
dual – IPO in the domestic and foreign market and listed immediately.
1.2.2. Depository receipts
Depository receipts (DRs) are a type of securities issued by a depository bank,
which represents the common share ownership of an offshore issuer. DRs are issued as
ADRs, GDRs and regional DRs (depending on the country). DRs allow international


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investors to trade foreign securities but are not subject to time constraints and regulation
such as direct investment in stocks.
1.3. Method of cross-listing
1.3.1. Public offering shares in the foreign market
The foreign company will choose the host market, complete the procedure for
public offering of stocks in that market. After completing the offering, the stock will be
listed and traded at the host stock exchange.
1.3.2. Issuing depository receipts
The reasons for the issuance decision are either: the demand for foreign ownership
of DRs or the need to issue DRs for raising capital of domestic companies. The process

of issuing DRs will involve domestic and international depository institutions (usually
investment banks) as the main manager in the issue.
1.4. Foundations for cross-listing
1.4.1. Conditions of cross-listing
1.4.1.1. Conditions of cross-listing registration
1.4.1.2. Conditions for maintaining cross-listing
1.4.2. The similarity of the legal framework between the domestic market and the
foreign market
1.4.2.1. Regulations on stock offering and listing
1.4.2.2. Provision on securities trading
1.4.2.3. Other provisions
1.5. Benefits and limitations of cross-listing of securities on international market
1.5.1. Benefits of cross-listing
1.5.1.1. Reducing capital cost
1.5.1.2. Accessing to foreign capital
1.5.1.3. Improving corporate governance
1.5.1.4. Improving presence in the host market
1.5.1.5. Improving stock liquidity
1.5.1.6. Impact on the domestic stock market
1.5.2. Limitations of cross-listing


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1.5.2.1. Cross-listing costs
1.5.2.2. Cultural barriers
1.5.2.3. Delisting
1.6. Factors impact on the cross-listing decision
1.6.1. Firms characteristics
1.6.1.1. Size of firms

1.6.1.2. Profitability
1.6.1.3. Business strategy
1.6.1.4. Ownership structure
1.6.1.5. Industry
1.6.2. The host stock market
1.6.2.1. Market size
1.6.2.2. Characteristics of the host market
1.6.2.3. Home bias
1.6.3. The domestic stock market
1.6.3.1. The degree of segmentation of the domestic stock market
1.6.3.2. Development orientation of foreign listed activities
1.6.3.3. Cultural proximity with the foreign market
1.6.3.4. Motivation of politics

CHAPTER 2: EXPERIENCE OF CROSS-LISTING SECURITIES ON
INTERNATIONAL MARKET AND LESSONS FOR VIETNAM
2.1. Experience of cross-listing
2.1.1. Actual situation of foreign listing activities
2.1.1.1. Size of foreign listed market
2.1.1.2. Market transaction scale cross-listed securities
2.1.2. International experience in cross-listing securities


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2.1.2.1. China
2.1.2.2. Japan
2.1.2.3. Korea
2.2. Empirical lessons on implementing cross-listing for Vietnam
2.2.1. Motivation of cross-listing

The decision of cross-listing depends on the type of firms and the business strategy.
Companies of various types will have different goals in reaching the global market. Crosslisted companies often have large scale in the domestic market. The business strategy will
dominate the decision of cross-listing. The company can aim at merger and acquisitions,
improve its visibility in the international market, access foreign goods market.
2.2.2. Choosing the host stock exchange
The choice of host market is not the same for every company and every country.
Regarding companies, they choose the host market in which they meet listing conditions
and will gain their initial motivation. The government may intervene at an early stage to
control risks through the regulation of target market lists.

CHAPTER 3: THE CROSS-LISTING ABILITY ON THE INTERNATIONAL
MARKET OF VIETNAMESE ENTERPRISE
3.1. Introduction to Vietnam’s listed stock market
3.1.1. Size of listed securities market
3.1.2. Liquidity of listed securities market
3.1.3. Listed securities
3.2. The cross-listing ability of Vietnamese enterprises on the international market
3.2.1. Domestic stock market
Although the scale of market capitalization has improved significantly in recent
years, the Vietnam Stock Exchange is considered as a small-scale market, low protection
of investor level.
3.2.2. Co-listing with the World Stock Exchanges
In recent years, market managers have becomes members of global organizations
to promote integration activities between domestic and international stock markets.


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3.2.3. Legal framework for cross-listing activities
3.2.3.1. Provisions on methods of issuing and listing securities

The legal framework for foreign securities offering and listing activities is
stipulated in Decree 58/2012/ND-CP and Chapter VII in Circular 162.
3.2.3.2. Regulation on target market
Article 64, Section 3 of Decree 58/2012/ND-CP
3.2.3.3. Provisions on ownership structure
Provisions on the ownership ratio of foreign investors in listed companies in
Decree 60/2015/ND-CP. Cross-listing must comply with regulations on maximum
ownership percentage of foreign investors.
3.2.4. Experience of cross-listing securities on the international market of Vietnamese firms
3.2.4.1. Actual situation of Vietnamese enterprises cross-listing on the international market
Cross-listing of Vietnamese companies has been implemented for more than 10 years
ago. By 2007, many Vietnamese enterprises had made plans to list stocks on foreign stock
exchanges. However, due to many procedural and legal limitations, most of these plans have
been failed, although companies as well as market managers have made efforts.
Table 3-5. Vietnamese listed firms have plans to cross-list shares on the
international market
No.
1

Company

Year
public

Vietnam Dairy
Products .JSC
PetroVietnam
Drilling&Well
Services Corporation
PetroVietnam Finance

Corporation

2007

4

Vingroup .JSC

2011

5

Masan Group
Corporation
KIDO Group

2011

2

3

6

2009

2010

2011

going public and listing shares on the foreign
stock exchange
Going public and listing shares on the Singapore
Stock Exchange

HSX

Host
stock
Exchange
expected
SGX

HSX

SGX

Delisting maximum of 90.000.000 shares on
HSX, going public and listing these shares on
Singapore Stock Exchange
Going public and listing shares on the foreign
exchange
Offering and listing shares or DRs on the foreign
stock exchange
Individual offering shares to foreign investors,
using these shares to issue GDRs and then listing
at the foreign stock exchange

HSX

SGX

HSX

SGX

Public information disclosure

Home
Stock
Exchange

HSX
HSX


10

7

PetroVietnam Gas
Joint Stock
Corporation
Phat Dat Real Estate
Development .JSC
Hoang Anh Gia Lai
.JSC

2012

Listing shares on Singapore Stock Exchange

Unlisted

SGX

2012

HSX

LSE/SGX

HSX

LSE

10

FLC Group JSC

HSX

SGX

11

NoVa Land
Investment Group
Corporation

2014/
2017
2018

Offering DRs or similar securities (individual
offering or follow-on offering
Individual offering shares to foreign investors,
using these shares to issue GDRs and then listing
at the foreign stock exchange
Listing shares on Singapore Stock Exchange
Issueing common shares or company bonds or
company convertible bonds which accepted to list
on foreign stock exchange

HSX

SGX

8
9

2012

Source: Author’s own work

Table 3-6. Vietnamese firms failed in listing overseas
Year
2010

2008

Company
Cavico Vietnam
Construction&Investment
.JSC
Vietnam Dairy Products
.JSC

Stocks
CavicoVN

Home Stock
Exchange
Unlisted

Host Stock
Exchange
NASDAQ

VNM

HSX

SGX

Reason for Failure
Violation of information requirements and
price requirements

2018

Hoang Anh Gia Lai .JSC

HAG

HSX

SGX

2014

FLC Group JSC

FLC

HSX

SGX

Irrelevant of shareholder regulations
between Vietnam depository Securities and
Singapore Stock Exchange
The number of outstanding GDRs was very
small, so all of them have been redeemed,
delisting after 10 years (11/2018)
Irrelevant of Regulations

2016

Vietjet Aviation .JSC

VJC

HSX

HKSE

Irrelevant of Regulations

Source: Author’s own work
3.2.5. Willingness to approve a cross-listing plan
3.2.5.1. Motivation and difficulties of cross-listing activities
The motivation to access capital from the international market and business
strategy towards foreign markets has been the greatest influence on the cross-listing
decision of enterprises. In addition, cross-listing is considered as a tool to promote the
brand of businesses in the domestic market.
The biggest difficulty belongs to the higher listing requirements and the difference
in the financial statements standards of Vietnam and the world. Inadequate legal
framework for foreign listing activities is also considered for businesses when they want
to access international capital markets.


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3.2.5.2. Willingness to approve a cross-listing plan
Table 3-1. Willingness to approve a cross-listing plan
Impact of cross-listing
Enterprises

Securities companies

Shareholders
Intended cross-listing
Enterprises
Shareholders
Securities companies

Raising capital
Improve visibility
Improve corporate governance
Raising capital
Improve visibility
Improve corporate governance
Protect minority shareholders
Increase access to information for shareholders

75%
100%
100%
100%
100%
100%
75%
100%

Never intended
Goals in the future
Agree the cross-listing plan
Financial advice for companies
when businesses arise demand

100%
50%
85.5%
100%
66.67%

Source: Results of survey
3.2.5.3. Host market selection
The host market is a larger capital size than domestic market and similar regional
culture, suitable business objectives with enterprises.
Table 3-2. The host markets are selected by Vietnamese companies
The host Stock
Exchange
SGX
HKSE
LSE
NYSE

Companies

Shareholders

Securities companies

75%
50%
0%
25%

78.3%
58.9%
21.4%
26.8%

100%
66.67%
0%
0%

Source: Results of survey
3.2.6. Degree of meeting the listing conditions at some international stock exchanges of
Vietnamese enterprises
3.2.6.1. Initial listing conditions
The level of satisfaction with financial standards is approximate. Comparing the
difference between VAS and IFRS shows that the method of recording revenue will make
less mistake than profit.


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Table 3-9. Number of listed HSX companies meeting financial requirements
STOCK
EXCHANGE

THE NUMBER OF
COMPANIES

Profit

32

Revenue and cash flow

6

Revenue

17

LSE

Market capitalization

302

LxSE

Market capitalization

303

HKE

Profit

154

Market capitalization/Revenue/Cash flow

34

Market capitalization/Revenue

23

Profit

52

Market capitalization/Profit

67

Market capitalization/Revenue

42

NYSE

SGX

*

FINANCIAL REQUIREMENTS

Financial ratios are taken from audited financial statements of listed companies

Source: Author’s own work
3.2.6.2. Additional listing conditions

- Activity history
The companies currently listed companies on HSX have operated for at least 2
years in the form of a joint stock company, while the history of operating 100 percent of
enterprises at least 3 years.
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Distribution of shares
Table 3-12. Stock distribution are applied at some Stock Exchanges

Stock
Exchange

The number of
Public float/number of shareholders

companies meeting the
requirement

NYSE

LSE

*At least 5000 shareholders, each holding at least 100 shares

75%

*At least 2.5 million shares are held by the public

100%

At least 25% of total issued shares to be listed must be distributed to the
public in one or more European Economic Area (EEA) member states.

78.8%


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LxSE

At least 25% of total issued shares to be listed must be held by the investors

100%

SGX

*At least 500 shareholders worldwide at the time of listing, if SGX and

100%

the primary home exchange do not have an established framework and
arrangement to facilitate the movement of shares between the
jurisdictions, at least 500 shareholders in Singapore or 1000 shareholders
worldwide.
*with IPO, the distribution requirements vary depending on the total size
of the offer (from 20% to 40%) and maximum share offering to each
shareholder (from 0.4% to 0.8%).
*At least 300 shareholders at the time of listing

HKSE

100%

*At least 25% of total issued shares to be held by the public

83%-94%

*Ownership of the 3 largest shareholders does not exceed 50%

* Based on listed companies that have sufficient financial conditions as prescribed at the Stock
Exchanges.

Source: Baker McKenzie
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Proportion of shares offered to the public

Many Stock Exchanges provide the minimum percentage of shares offered to
foreign companies. The proportion of shares offered for cross-listing depend on the
remaining foreign ownership percentage in the domestic market.
Table 3-18. The number of companies HSX that meet financial requirements and
foreign ownership
Stock

Fiancial requirements

Exchange

The remaining

Room NN còn

foreign

lại lớn hơn 5%

ownership is less
than 5%

NYSE

Profit

10

22

Revenue and cash flow

4

13

Revenue

2

4

LSE

Market capitalization

64*

238*

LxSE

Market capitalization

25

278


14

HKE

SGX

Profit

20

134

Market capitalization/Revenue/Cash flow

10

24

Market capitalization/Revenue

8

16

Profit

12

40

Market capitalization/Profit

16

51

Market capitalization/Revenue

13

29

* The LSE has a minimum distribution ratio in 25% of the EEA countries, with the number of companies
having less than 24% of foreign ownership

Source: Author’s own work
After examining the extent to which the listing conditions are met, I find 20 listed
companies that best meet the initial listing conditions at the SGX and make a comparison
with the remain stock exchanges.
3.2.6.3. Corporate governance rules
Using a list of 20 listed companies that best meet the initial listing conditions at
SGX, I compare the conditions for maintaining cross-listing (corporate governance rules,
international financial statements standards). The level of meeting the corporate
governance rule is relatively good, but only 04 listed companies have published their
financial statements according to IFRS for 03 consecutive years.
3.3. Factors impact on the ability of meeting listing conditions in SGX of Vietnamese
enterprises.
3.3.1. Data
3.3.2. Methodology
Dependent variable is dummy variable which equal 1 if firm meets initial listing
conditions of Singapore Stock Exchange and 0 otherwise. Because of the dependent
variable is a binary variable, the logistic binary regression method and the Cox Hazards
model will be used to determine the characteristic of firms that meet the conditions of
cross-listing at a particular point in time.
3.3.3 Research model


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- Logistic model:
𝒍𝒏 {

𝑷𝒊
} = 𝜷𝟎 + 𝜷𝟏 𝑳𝒏𝑻𝑨𝒊,𝒕−𝟏 + 𝜷𝟐 𝒍𝒆𝒗𝒆𝒓𝒂𝒈𝒆𝒊,𝒕−𝟏 + 𝜷𝟑 𝒔𝒂𝒍𝒆𝒈𝒓𝒐𝒘𝒕𝒉𝒊,𝒕−𝟏

𝟏 − 𝑷𝒊

+ 𝜷𝟒 𝒇𝒐𝒓𝒆𝒊𝒈𝒏𝒕𝒐𝒕𝒂𝒍𝒔𝒂𝒍𝒆𝒔𝒊,𝒕−𝟏 + 𝜷𝟓 𝒓𝒐𝒂𝒊,𝒕−𝟏 + 𝜷𝟔 𝒔𝒕𝒂𝒕𝒆𝒐𝒘𝒏𝒊,𝒕−𝟏

+ 𝜷𝟕 𝒇𝒐𝒓𝒆𝒊𝒈𝒏𝒐𝒘𝒏𝒊,𝒕−𝟏 + 𝜷𝟖 𝒃𝒍𝒐𝒄𝒌𝒉𝒐𝒍𝒅𝒆𝒓𝒊,𝒕−𝟏 + 𝜷𝟗 𝒃𝒍𝒐𝒄𝒌𝒉𝒐𝒍𝒅𝒆𝒓𝟐𝒏𝒅𝒊,𝒕−𝟏

-

Cox Hazards model:
𝒍𝒏 {

+ 𝒊𝒏𝒅𝒖𝒔𝒕𝒓𝒚(𝒅𝒖𝒎𝒎𝒚) + 𝑼𝒊𝒕

𝒉(𝒕)
} = 𝜷𝟎 + 𝜷𝟏 𝑳𝒏𝑻𝑨𝒊,𝒕−𝟏 + 𝜷𝟐 𝒍𝒆𝒗𝒆𝒓𝒂𝒈𝒆𝒊,𝒕−𝟏 + 𝜷𝟑 𝒔𝒂𝒍𝒆𝒈𝒓𝒐𝒘𝒕𝒉𝒊,𝒕−𝟏
𝒉𝟎 (𝒕)

+ 𝜷𝟒 𝒇𝒐𝒓𝒆𝒊𝒈𝒏𝒕𝒐𝒕𝒂𝒍𝒔𝒂𝒍𝒆𝒔𝒊,𝒕−𝟏 + 𝜷𝟓 𝒓𝒐𝒂𝒊,𝒕−𝟏 + 𝜷𝟔 𝒔𝒕𝒂𝒕𝒆𝒐𝒘𝒏𝒊,𝒕−𝟏

+ 𝜷𝟕 𝒇𝒐𝒓𝒆𝒊𝒈𝒏𝒐𝒘𝒏𝒊,𝒕−𝟏 + 𝜷𝟖 𝒃𝒍𝒐𝒄𝒌𝒉𝒐𝒍𝒅𝒆𝒓𝒊,𝒕−𝟏 + 𝜷𝟗 𝒃𝒍𝒐𝒄𝒌𝒉𝒐𝒍𝒅𝒆𝒓𝟐𝒏𝒅𝒊,𝒕−𝟏

Inside:

+ 𝒊𝒏𝒅𝒖𝒔𝒕𝒓𝒚(𝒅𝒖𝒎𝒎𝒚) + 𝑼𝒊𝒕

i: i - company (i=1-305)
t: year (t=2014-2018)
Dependent variables:
-sgxlist: get value 1 when company i meets cross-listing conditions at year t, get value 0
otherwise.

-Pi: Probability for enterprise i cross-listing at SGX (sgxlist get value 1)
- h(t): immediate cross-listing ability of the firm i year t
Independent variables:
-

LnTA: Logarithm total assets of the company
Leverage: Financial leverage ratio of the firm, calculated by total debt/ total assets
Salegrowth: revenue growth of an enterprise, calculated by the revenue of the
following year/revenue of the previous year.
Foreigntotalsales: export turnover/total revenue of enterprise
ROA: the rate of return on total assets of the enterprise
Stateown: The percentage of ownership of state of the company
Foreignown: The percentage of foreign ownership of the company
Blockholder5: The percentage of shareholder ownership greater than 5% (excluding
State ownership)


16

-

Blockholder2nd: dummy variable, ownership of a major shareholder of more than
10% of the company.
Industry: dummy variables for industries (according to HSX’s sub-standard applicable
to listed companies)

3.3.4. Results and analysis
3.3.4.1. Descriptive statistics
3.3.4.2. Results
3.3.5. Conclusion

Total assets and ROA play a vital role and show positively significant results with
the ability to meet SGX listing conditions. However, leverage has a negative impact on
the company’s ability to meet cross-listing requirements of SGX. For the ownership
variables, the foreign ownership is found to have a positive effect on the probability of
cross-listing, or the company owner by more foreign shareholders will more likely
foreign listing. Ownership of lager shareholders and state ownership negatively affect
cross-listing ability of Vietnamese listed firms because of the effects of restricting the
personal interests of shareholders in international stock markets. The industry variable
that is statistically significant for the sgxlist1 variable has different target market
implications for the ability to meet cross-listing conditions differently.

Table 3-20. Results of models


17

SGXLIST
Variables

previous

Hypothesis

results

Logistic
model

Cox
Hazards

models

SGXLIST1
Logistic
model

Cox
Hazards
models

H1: The ability of meeting cross-listing
Size firm

Positive

conditions increases with size of Vietnamese

Positive

Positive

Positive

Positive

Negative

Negative

Negative

Negative

Not
significant

Not
significant

Not
significant

Not
significant

Not
significant

Negative

Negative

Positive

Positive

listed firms
H2: The ability of meeting cross-listing
Leverage

Negative

conditions decreases with leverage ratio of
Vietnamese listed firms

Sales
growth

Positive

H3: The ability of meeting cross-listing
conditions is higher for firms in
development phase

Positive

H4: The ability of meeting cross-listing
conditions increases when Vietnamese listed
firms have export sales

Positive

H5: The ability of meeting cross-listing
conditions increases with profitability of
Vietnamese listed firms

Negative

H6: The ability of meeting cross-listing
conditions of firms decreases with State

ownership

Foreign
total
sales
ROA
State own
Foreignown

Blockhol
der

Industry

Negative

Not
significant

Not
significant

Negative

Positive

Positive

Not

Not

significant

significant
Positive

H7: Foreign ownership positively effect on
the ability of meeting cross-listing
conditions of Vietnamese listed firms.

Positive

Positive

Positive

H8: The proportion of block holder with at
least 10 percent of the voting rights effect on
the ability of meeting cross-listing
conditions of firms.

Negative

Negative

Negative
Not
significant

H9: The ability of meeting cross-listing
conditions of firms decreases with
proportion of block holder with at least 5
percent of the voting rights.
significa
nt

H10: The ability of meeting cross-listing
conditions of firm in each industry is
different

Not

Not

significant

significant

significant

significant

Source: Author’s own work

3.3.6. Limitations of the model


18

The research model is limited in scope of space and time. Model date can expand
all listed companies on the Vietnamese Stock market and extend the period from the
business first cross-listing plans.
3.4. General comments on the cross-listing ability of Vietnamese enterprises
3.4.1. Advantages
3.4.1.1. Growth of the domestic stock market
3.4.1.2. Legal framework for securities listing activities
3.4.1.3. Cooperation agreement between domestic and international Stock exchanges.
3.4.1.4. Experience of listing securities on foreign markets of Vietnamese enterprises
3.4.1.5. The level of meeting cross-listing conditions well in some foreign Stock exchanges
3.4.1.6. Approval level of cross listing
3.4.2. Disadvantages
3.4.2.1. Enterprises are not ready to cross-list securities
3.4.2.2. International cooperation activities on foreign listings are limited
3.4.2.3. The legal framework for cross-listing is not fulfill
3.4.2.4. The level of meeting cross-listing maintenance conditions is not high
3.4.2.5. The ownership structure is unreasonable in many listed companies
3.4.3. Reasons
3.4.3.1. Cause from the enterprises
Firstly, the awareness of businesses about the benefits of cross-listing activities is limited
Second, the reluctance to access international capital markets stem from linguistic and
cultural barriers.
Third, the company has not actively prepared a financial statement according to
international standards.
Fourth, the personal benefits of the major shareholder groups dominate the foreign listing
decision.
Fifth, business still maintains the maximum proportion of foreign ownership.
3.4.3.2. Cause from the other subjects
Firstly, the stock market scale is small compared to region.

19

Second, cross-listing activities have not received adequate attention from market
regulators.
Third, there is a difference between VAS and IFRS
Fourth, the State ownership rate in enterprises is still high.
Fifth, decrees for violations of disclosure of information in transactions are not deterrent.

CHAPTER 4: SOLUTION TO PROMOTE CROSS-LISTING ACTIVITIES ON
THE INTERNATIONAL MARKETS FOR VIETNAMESE ENTERPRISES.
4.1. Orientation of development of cross-listed securities activities on the
international market
4.1.1. Orientation of development of cross-listing activities of securities on
international market by market regulators
4.1.2. Development orientation of cross-listing securities on international market from
enterprises
4.2. Solutions to promote cross-listing activities of Vietnamese enterprises
4.2.1.1. Understand the benefits of cross-listing
4.2.1.2. Improve the financial situation of the business
4.2.1.3. Information disclosure in international languages
4.2.1.4. Improve corporate governance activities in accordance with international
practices
4.2.15. Actively prepare financial statements according to international standards
4.2.1.6. Identify key business sectors and plan to increase foreign ownership according to
appropriate roadmap
4.2.2. Solutions for regulatory agencies and other entities
4.2.2.1. Government
Firstly, ensure the implementation of the roadmap of solutions that the Stock market
restructuring Scheme has been approved by the Government and the Project of applying

international accounting standards into Vietnam.
Secondly, pay attention to international listing and offering


20

Thirdly, agree on documents related to foreign ownership
Fourthly, encourage listing activities of foreign enterprises in Vietnam
4.2.2.2. Ministry of Finance
Firstly, quickly implement the Prime Minister’s opinion to the Project of applying
international financial statements standards, drastically deploying the objectives of the
Project.
Secondly, signing the agreement of approving the new financial statements of Vietnam
Thirdly, there needs to be a specific roadmap for privatization and divestment activities
for faster and more effective implementation
Fourthly, it is possible to study and formulate a scheme related to the issuance and listing
of securities on international markets.
4.2.2.3. State Securities Committee
Firstly, to develop a complete legal framework related to the offering and listing of
securities on international markets.
Secondly, consider regulations on the percentage of public ownership to limit voting
rights in specific shareholder groups.
Thirdly, coordinate with Ministry of Finance to apply the international financial
statements standards in Vietnam.
Fourthly, strengthening cooperation activities at management level with markets with
major stock exchanges in the world, proposing target market groups in the first phase to
encourage cross-listing activities of enterprises.
4.2.2.4. Stock Exchanges
Firstly, strengthening cooperation agreements and information exchange with foreign
stock exchanges

Secondly, agree on branch standardization in the direction of conformity with
international practices.
Thirdly, improve listing conditions through the application of the rules of the Corporate
Governance Code according the best practices.
4.2.3. Other subjects
Vietnam Securities depository
Securities depository organizations


21

Securities companies
Auditing organization
4.3. Roadmap for cross-listing of securities on international markets for Vietnamese
enterprises.
4.3.1. Roadmap
Phase 1: From 2019 to 2022
Phase 2: from 2022 to 2025
Phase 3: from 2025 to 2030
4.3.2. Proposed cross-listing on the Singapore Stock Exchange
4.3.2.1. Based to select target market
Firstly, SGX is chosen by many Vietnamese firms; Secondly, SGX has the highest
selection rate in the survey results of host markets; Thirdly, SGX is the largest foreign
listed stock exchange in Asia-Pacific region and has a cultural similarity with Vietnam;
Fourth, SGX accepts the reference financial statements according to IFRS; Fifth, SGX
has a good level of meeting cross-listing conditions.
4.3.2.2. Identify businesses that meet the conditions for cross-listing
After screening according to the following conditions: Financial conditions (one of
the three conditions of SGX), the remaining ownership percentage of foreign investors at
the end of 2018 is greater than 5%, the state ownership at the end of 2018 is less than

75%, the number of shareholder over 1000 (due to no cooperation agreement between
Vietnam and Singapore Stock Exchange), there are 47 enterprises meeting the crosslisting conditions.
4.3.2.3. Method of offering and listing
Offering global depository receipts
Offering Stocks
4.3.2.4. Maintain cross-listing and delisting
Enterprises need to meet the conditions of corporate governance, information
disclosure, financial statements prepared according to international standards,…
Compared with businesses that meet the listing conditions at SGX, only 04 companies
have announced their financial statements according to IFRS in the last three years.


22

Table 4-2. Vietnamese firms have published their financial statement according
to IFRS and meet the conditions for listing at SGX
No.

Ticker

Company

Audit, Nominating,
Remuneration Committee

Independe
nt
directors
ratio

Foreign
directors

1

TCB

Vietnam Technological and
Commercial Joint Stock Bank

Meeting

14.29%

1

2

VIC

Vingroup .JSC

Not meeting

33.33%

1

3

VNM

Vietnam Dairy Product .JSC

Not meeting

30.00%

1

4

VPB

Vietnam Prosperity Joint Stock
Commercial Bank

Nominating Committee

20.00%

0

Source: Author’s own work


23

CONCLUSION
The research results of the dissertation systematize the sufficient theoretical

framework for cross-listing activities. Based on the empirical research analysis in many
different markets across the globe and some basic theories, the thesis has generalized the
positive and negative impacts of cross-listing on listed companies. The dissertation also
factors affecting the foreign listing decision of the business. I use various research
method such as comparison, survey, quantitative research to thoroughly solve the three
research questions posed.
Firstly, Vietnamese businesses are now more likely to implement cross-listing in
international stock markets. Opportunities come from the international integration of
domestic stock market through cooperation agreements.
Secondly, considering the scale of listed companies on the HSX, the level of meeting
cross-listing conditions at some major stock exchanges is relatively good, especially for
Hong Kong Stock Exchange and Singapore Stock Exchange.
Thirdly, quantitative research results show that the size of firms, profitability and foreign
ownership ratio have a positive impact. Meanwhile, the ratio of financial leverage, the
ownership of block holder, the State ownership has a negative impact on cross-listing’s
ability at SGX.
The limitation of the thesis is that the research scope only focused on listed companies on
HSX in the period from 2014 to 2018.