CIC: Listed firms with excellent ratings up 46%
By Hong Phuc - The Saigon Times Daily
HANOI – Listed firms rated as excellent this year are up by 46% from last year, according to the results of ratings announced on Wednesday in Hanoi by the Credit Information Center (CIC) of the State Bank of Vietnam.
The State-owned credit information center had cooperated with international information provider Dun&Bradstreet to rate 539 listed enterprises by June 30, excepting banks and fund units. Of these companies, there were 149 seeing their ratings improve from the previous year.
The number of enterprises rated excellent, or AAA, rose 46%, while the number of above-average and good enterprises (BB and AA respectively) inched up 50.2%, and the number of medium enterprises (CC) leapt 66.7%.
One-third of the enterprises on the southern bourse (82/240) were AAA-rated while 83 enterprises out of 299 on the Hanoi bourse got the excellent rating.
Two-thirds of enterprises on both exchanges were ranked good and above average, unchanged from last year, while the number of medium enterprises increased to 15 this year from nine last year. “This is partly due to a strongly increasing number of new listed enterprises, at 181,” said Nguyen Huu Duong, deputy general director of CIC.
Regarding the scale of operation, CIC said major enterprises listed on the Hochiminh Stock Exchange accounted for 61% of the total number in the latest ratings. New big enterprises trading shares on the bourse grew fast, at 52.3%, while 84.7% of enterprises of small and medium size listed on the northern bourse.
Big enterprises are more efficient than small and medium ones. In addition, companies listing on the southern bourse do better business than those on the northern bourse.
According to the rating results by sector, the rubber and paper sectors had the biggest number of enterprises ranked AAA, or 62.1% of the total. Next is the essential goods manufacturing industry as half of enterprises in the sector were rated AAA. The last sector was manufacturing with 11.5% of enterprises ranked AAA.
CIC said that based on reports of enterprises, financial indicators of enterprises were positive in general, as revenue and profit increased from last year. Business indicators showed that enterprises’ payment ability improved, as their short-term assets could meet short-term loans and their liquidity was also good.
In addition, operation figures of enterprises were better, buoyed by their effective business promotion programs, faster capital cycle, and good asset management. The results showed that the operating capital structures of enterprises were reasonable with good financial control.
Profit indicators of major enterprises were at the highest level. Increased profit was due to effective cost management, reasonable cost, and good assets management.
CIC is the only State credit rating institution in Vietnam at the moment. It now manages 18 million credit information files of individuals and enterprises, and has annual revenue of over VND20 billion.