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)
Hanoi (VNA) - 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.

Analysts say that most domestic garment and textile companies are concerned about the possibility that if they list, foreign investors could corner large chunks of their shares or even attempt hostile takeovers.

Many companies also fear their shares would not get fair value if listed now, because the sector faces many challenges.

Last year was a hard one for the sector, with results much worse expected, including just 28.3 billion USD worth of exports, a year-on-year increase of 5.6 percent.

In addition, the year’s target had been adjusted down from 31 billion USD to 29 billion USD, 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 percent to less than 29 billion VND (1.28 million USD), Thanh Cong Textile Garment Investment Trading Joint Stock Company’s after-tax profit was down 25 percent to 114 billion VND (5.06 million USD).

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.-VNA