The final result of the Circular No.13 review is coming out tomorrow!" said a young man in a loud voice on September16 among a group of investors eyeing the trading board at the offices of Artex Securities Company. A crowd immediately swamed around him, flooding him with questions.
"Calm down!" the young man said. "My friend just called me."
The crowd issued a collective groan, and people began returning to their seats. But a number began making calls on their mobile phones while others began to talk quietly together, and all of the talk was about the State Bank of Viet Nam's review of Circular No.13, its controversial regulation that would impose stricter capital adequacy requirements on the nation's commercial banks.
Such rumours are frequently rife among investors at the offices of stock brokerages nationwide.
"I am messaged hundreds of times a day," said Nguyen Quang Vinh, an investor with Saigon Securities Inc. "They couldn't all be verified, but some of the tips are true."
"I always read newspapers before the session opens, especially on the internet," said Nguyen Trung Dung, an investor with SME Securities Company.
"Information murmured around the markets can be reliable if one or two of the newspapers have written about it. Reporters are faster than we are and have closer relationship with companies. That's their job," Dung said.
Rumours and hot tips had continued to be more popular among investors than official disclosures by companies, said John Nolan, a market analyst with a HCM City-based fund management company.
"Investor relations pages on the websites of many listed companies simply contain required disclosures, pursuant to regulations," Nolan said. "Corporate activities are rarely disclosed, except major events."
Few companies even paid much attention to communicating with their own stockholders, he added.
A survey of Singapore-based fund managers conducted by Singapore Management Univeristy (SMU) and the Investor Relations Professionals Association found that 89 per cent were willing to pay a quantifiable premium for companies with good investor relations (IR).
"Research has found that a good IR programme can have a positive impact on corporate image, and there is a clear correlation between image and share price," said the survey's principal Investigator, Dr. Mark Chong, an associate professor of corporate communication practice at SMU.
"Our findings show that companies can and should invest much more in investor relations than they currently do, especially when doing so will result in a higher valuation of their shares," said Chong.
"We understand how thirsty investors feel for information," said the director of a major consumer goods producer who asked to remain anonymous.
"We are trying to satisfy that thirst by updating essential news like our prospectus and financial reports. But we can't post everything," he said.
Noting that some information could be leaked to competitors, he urged shareholders "to understand what can and cannot be disclosed."
Dao Van Duy, who is responsible for corporate disclosure at a company with shares listed on the Ha Noi Stock Exchange, said investors relations programme cost a lot of time and money that many companies cannot afford.
"If we are a small company, we would hardly be doing it well," Duy said. "Even management sometimes is ill-informed or mispeaks, causing investors to misunderstand."
But investor relations was not simply verbal communications or information provivision between companies and investors, Nolan said. "It aims to make relations between company and shareholders closer, by fostering mutual understanding."
The investor relations efforts of some domestic companies had noticeably improved over the past couple of years, Nolan added.
"Many companies like Vinamilk, Hoang Anh Gia Lai and Refrigeration Electrical and Engineering have become more open to investors, through more investor conferences, roadshows of their projects, or allowing shareholders to visit and tour company facilities."
These efforts needed to encouraged, Nolan added. "A specific sector is needed to monitor and respond to investor inquiries."
Meanwhile, both companies and investors needed a better understanding of the meaning of investor relations, not simply to lift share prices, but to ensure investors know of the steadiness of a company, Nolan said.