Due to the slow progress of equitization, the scale of state-owned enterprises (SOEs) in the economy is still very large, accounted for 7% of total assets and 10% of equity of all enterprises in the market.

The Ministry of Finance has stated in its recent report that the equitization process of State-owned enterprises (SOEs) has been taking place very slowly and therefore has not achieved its set target.

Some state-owned enterprises (SOEs), after equitization, have changed their production and business models to exploit advantages in land, thus ‘killing’ their core businesses.

The situation changed in a positive direction when the stock market and and stock prices went up. This will enable divestment from SOEs and the equitization process to take place more easily.

The capital the State has invested in 807 enterprises totals VND1.7 quadrillion. Pre-tax profit is VND162 trillion, and losses are up to tens of trillions of dong.

This would be the first step for Vietnam’s state firms to list shares on international stock exchanges.

Vietnamese key leaders, one after another, have left their posts at Sabeco, the largest brewer in Vietnam. Meanwhile, Thai billionaire Charoen Sirivadhanabhakdi is making a rare deal in Southeast Asia.

The State plans to hold 100 percent of charter capital in only four holding companies: PetroVietnam, Electricity of Vietnam (EVN), State Capital Investment Corporation (SCIC) and Viettel.

Many equitized enterprises have suffered big losses as state capital in these unprofitable enterprises is difficult to sell because of unreasonable pricing.

Vu Dinh Anh, a respected economist, has pointed out that in many cases, investors decide to buy shares of equitized enterprises because the enterprises have many land plots in advantageous positions, or ‘golden land’.

Experts say these enterprises need an ‘exchange transfusion’, which means a basic change in corporate governance. If not, they will continue taking losses.

The government has sent a report to the National Assembly on investment of state capital in enterprises, and the use of the fund for enterprise support and development in 2019.

Which enterprises - state-owned (SOE), state-invested, foreign-invested (FIE) or privately run - operate more effectively?

Many enterprises have reported big losses because of Covid-19, including large state-owned groups.

The equitization of state-owned enterprises must place more importance on the management experience of strategic investors.

Many state-owned enterprises (SOEs) have been equitized but have not seen considerable changes as the state's ownership ratio remains high. Many of them are still taking losses and struggling to survive.

Dr Burkhard Schrage, Senior Programme Manager of Management at RMIT’s School of Business & Management talked about the work of equitising State-owned enterprises during the COVID-19 pandemic.

The policy under which enterprises’ managers are paid based on the enterprises’ scale and numbers of workers is unreasonable, according to experts.

The equitisation of State-owned enterprises (SOEs) has fallen behind the target set by the Government and ministries for 2017-2020.