Domestic companies need better portfolio mix of investments: experts
Domestic companies need better portfolio mix of investments: experts
Vietnamese enterprises' investments have failed due to improper goal-setting, short-term planning and an imbalanced portfolio mix, the chief financial officer of Bao Viet Holdings said at a forum held in HCM City yesterday.
Speaking at the 6th Viet Nam CFO Forum 2014 held yesterday in HCM City, Le Hai Phong said that domestic companies had not hired the right advisors or established self-monitoring systems, and that without precise goals, companies would face difficulties in planning and choosing the right investments.
"Portfolio balance should be reviewed in a timely manner by taking into account financial positions and risk factors," he said. "An improper portfolio mix can lead to huge losses of money or lower profits than what the company should have achieved."
In addition, a lack of a system to assess risks is a serious problem, and companies need a warning system, he said. More information should be collected about potential investment instruments, so that risks can be identified.
Advisers to the company must be qualified and experienced in the local market as well, he added.
The forum on "Building Success From Failure" was organised by the Viet Nam Chief Financial Officers (VCFO) in co-operation with Japan Association for CFOs (JACFO) and the Association of Chartered Certified Accountants UK (ACCA).
Speakers said the role of the chief financial officer (CFO) has gone beyond the traditional position related to capital.
Speaking at the forum, Robin Page, CEO of Treasury Management International, said today's disruptive market and regulatory environment required financial departments to become a useful strategic partner.
As staff and budget are limited, technology is now considered the most effective enabler.
For example, automating operational workflow increases efficiency in treasury and provides the treasurer with time for more strategic tasks.
Gathering all financial information in a single technology platform provides visibility of cash and risk across subsidiaries, banks and currencies.
Moreover, analysing and reporting financial information in real time increases the value treasury contribute to business success.
Economic outlook
Prospects of a stronger economy were expected at the beginning of this year, but the majority of Vietnam enterprises are still facing difficult times, suffering heavy losses and facing the prospect of going out of business, according to speakers at the forum.
Nguyen Xuan Thanh, director of the Fulbright Economics Teaching Programme, gave an overview of the economic outlook for 2015 in Asia and Viet Nam.
He said Viet Nam had followed China in rapid credit and investment growth but had lower efficiency and growth (but less pollution).
"The economic growth of emerging economies including Viet Nam is heavily reliant on FDI capital," he added.
Only the FDI sector is continuing to do well because they are labour-intensive and largely not affected by economic difficulties facing the Vietnamese economy or the weaknesses of Vietnamese institutions.
This year, the Vietnamese Government will issue both fiscal and monetary policies to maintain growth at 6 per cent or more for 2015. The economy has been developing under its potential, and should have reached a growth rate of 7 per cent, speakers said.
The Government plans to continue to promulgate new ministerial circulars to improve financial prudential regulation.
"SOE equitisation is the main policy thrust," he said, adding that next year major international trade deals such as TPP and VN-EU agreements would also be concluded.
The forum saw the participation of more than 300 delegates, including Chief Financial Officers, Senior Financial Analysts, experts from domestic and international financial institutions, and chairman and CEOs of some of the largest enterprises in Viet Nam.
bizhub
