Vietnam: $3.3B Super Typhoon Disaster, VNG Police Raid & GoJek Market Exit with Valerie Vu- E479

Valerie Vu, Founding Partner of Ansible Ventures, and Jeremy Au discussed:

1. $3.3B Super Typhoon Disaster: Super Typhoon Yagi caused over $3.3 billion in damage and resulted in more than 300 deaths in northern Vietnam. The typhoon was one of the worst in 30 years, which significantly disrupted Vietnam’s economy with power outages in factories and offices for over a week. As a result, the country's GDP growth forecast was reduced by 0.15%. They also highlighted Southeast Asia's susceptibility to natural disasters which are often underappreciated by global investors.

2. VNG Police Raid: Vietnam’s police raided VNG, Vietnam's first unicorn for a sudden investigation. The board appointed Kelly Wong as interim CEO, with little news regarding the status of founder Le Hong Minh. The regional investor community has raised concerns about regulatory uncertainty and startup exit conditions, as VNG had been seen as Vietnam’s frontrunner and pioneer for an IPO in the US.

3. GoJek Market Exit: They also covered Gojek’s exit from the Vietnamese market after six years of operations and over $200 million in investment. Gojek’s departure follows the earlier exits of Uber and Didi, leaving Grab and domestic players like Be and Green SM (owned by VinFast) to dominate the market. Valerie suggested that a future collaboration between Be and Green SM could emerge to challenge Grab’s market position.

Jeremy and Valerie also discussed Vietnam’s stock market status upgrade to "emerging market", Singapore’s stock exchange challenges, and regional tech startup consolidation.

Join us at Geeks on a Beach!

You don't want to miss Geeks On A Beach, the unique premier startup conference in the region! Join us from November 13 to 15, 2024, at JPark Island Resort in Mactan, Cebu. This event brings together tech enthusiasts, investors, and entrepreneurs for three days of workshops, talks, and networking. Register at geeksonabeach.com and use code BRAVESEA for a 45% discount for the first 10 registrations, and 35% off for the next ones.

(01:49) Jeremy Au:

Hello, Valerie.

(01:51) Valerie Vu:

Hi, Jeremy.

(01:51) Jeremy Au:

Well, it's always nice that instead of Vietnam internet connection, where the cables seem to be very slow, we get to do this in person because you keep visiting Singapore, So you get to join me in the home studio. So, what brings you to town?

(02:02) Valerie Vu:

I guess the conference week bring me to town. Yeah, it's like 10, 12 days of consecutively like events and conferences.

(02:09) Jeremy Au:

Yeah. So there's a F1 race, the TOKEN2049, Milken conference, Superreturns, and there's a bunch of other ones as well. Oh, and then the AGMs are here as well. A lot of VCs have moved their annual general meetings to this time season because our global LPs are in town. So even though it's not necessarily fits exactly with their fiscal year, this tickets as their AGM 'cause nobody's gonna make a trip in September from America.

(02:32) Valerie Vu:

Yeah.

(02:33) Jeremy Au:

And then come back for your November, December aGM.

(02:36) Valerie Vu:

Yeah. I guess September is like Singapore month. September Singapore.

(02:39) Jeremy Au:

Yeah. Yeah. It's also some of my month of my birthday. Oh yeah.

(02:41) Valerie Vu:

Happy birthday.

(02:42) Jeremy Au:

Yeah. No, No, it's always so, extroverted out because it's like this month there's so many events. So I'm normally an extrovert, but after this month is done, I'm just like a massive introvert. I'm just in bed reading my book. I'm so tired meeting people.

(02:54) Valerie Vu:

Only once a year, so gotta show up,

(02:57) Jeremy Au:

Definitely. I was at the One Republic concert last night and it was a massive thunderstorm. It's Asia weather, so yeah.

(03:04) Valerie Vu:

, talk about the thunderstorm. Yeah, I was, catching up with my friends at La Pazat last night, and we were stuck in a thunderstorm for, two, three hours.

(03:12) Jeremy Au:

Oh, from the 10 plus PM.

(03:15) Valerie Vu:

Yeah.

(03:15) Jeremy Au:

Yeah. So that was a One Republic concert. So my sister and I were enjoying One Republic and then the storm, we could, well, the locals understood it first. So we were the first one to exits and all the tourists were like, why is there so many people leaving just when the music is getting good? Then it became a giant storm.

(03:29) Jeremy Au:

But of course that storm is nothing compared to what Vietnam went through. Right.

(03:32) Valerie Vu:

Yeah. So, a week ago, we were hit by a major, like super typhoon called Yagi, that hit mostly northern part of Vietnam where usually, severe weather doesn't really hit the north part of Vietnam. It's usually only the central, but that was like the first time in the history, like the last 30 years, we experienced that severe damage from a super typhoon. So the typhoon Yagi damage a lot of building properties, even kill over 300 people because the typhoon brought in like a lot of landslides and severe flooding. So economy was also heavily impacted. Not only like we lost over 300 people. We also estimate that direct damage from the typhoon is at least 1.6 billion US dollars because actually, the typhoon collapses a bridge, a major bridge in the north.

(04:20) Jeremy Au:

Oh no.

(04:21) Valerie Vu:

Yeah. Even when the typhoon was already gone, the flooding lasted for over a week. So a lot of factory and even officers didn't have electricity for a week straight. So the indirect damage we cannot really estimate exactly yet, but the direct damage is a 1.6 billion. The economies are expecting that the GDP growth of Vietnam this year will probably be hit and decreased by 0.15%.

(04:50) Jeremy Au:

Oh, no. And just earlier this year, we were discussing, they were optimistic about the growth rate this year, but yeah, that's a shame.

(04:56) Valerie Vu:

Yeah. So no one can predict the typhoon that hit the northern part, which contribute majorly to the economy of Vietnam. So, yeah, it was a really saddening period. A lot of people lost entire homes and their net worth, like properties. The entire village in Lao Cai province, in Lao Cai even got hit by landslide. So the entire village got wiped out overnight.

(05:19) Jeremy Au:

I think, it's such a shame and I think the awkward reality is a lot of it happens in Southeast Asia, right? I think people forget that the tsunami that happened, the big one around the Christmas period, impacted Thailand, Indonesia, And many places across Asia. So that's one. Now, obviously with typhoon. So I think that's something that people under appreciate because that weather pattern obviously is part of the monsoon season, which is what allowed for early trade between China, Southeast Asia with India and then India with Europe. So I think it's always created that trade, but like you said, because of the typhoons, the weather patterns, as well as obviously the seismic activity, right?

For earthquakes, there's actually quite a lot of, if you are outside Asia or you're not even very familiar with it in the business sense, you tend to get surprised by it because the news makes it like, wow, has this happened? But I think for us in business, it's almost like a known unknown. It's like, we know it's going to happen every year, every other year, every three years. So I think you had to price in that risk.

(06:13) Valerie Vu:

Yeah. If like I mentioned, usually the typhoon usually only hit the central Vietnam, so the Northern population is always, was under prepared whenever an event like that happened. So yeah, we did not expect that kind of like, hit Vietnam very sudden. Tough moment for the country, but I think Vietnamese people are really resilient and we are coming back strong. But I think moving forward, even not just the central part, but not often, in the entire Vietnam have to be more stronger built for another typhoon coming, for example. There might be another one coming this year.

(06:45) Jeremy Au:

Yeah, I think, the problem is safety is written in blood, right? So all your precautions, every rule you see on the construction site is because something went wrong in the past, right? So I think a lot of Southeast Asia, a lot of the building codes, the requirements for like even the stability of the house during a seismic event around Indonesia, a lot of it is, there's a lot of active volcanoes in Southeast Asia, all the islands and everything. So, a lot of it has to be, it's like the disaster happens, then the government takes action, starts installing the tsunami alarms and starts training people. It's like that.

And I think that's why people under appreciate Singapore to some extent, because Singapore is actually one of the few countries in Southeast Asia that is very rare to have weather adverse events. Because if you look at the position of it, it's like, you're talking about tsunami or you're talking about typhoon, like you need a very large expense of water to pick up speed and velocity and so forth. But actually Singapore is sheltered by the Indonesian main islands. And it's also sheltered by Malaysia. So actually there are very few ways for a storm to pick up the energy, and of course, Singapore is in a stable part that's not seismically active as well. So I think it's like one of those, it's like, I don't, I don't think people are like, Oh, Singapore is so good because it's not in a seismic zone. It's not a plus point, but I think people have like under appreciate what's the, not having that risk factor, that happens.

(07:57) Valerie Vu:

I would say still be careful after the typhoon, Guangning province, which is a really wealthy province in the North, their main construction sites, such as like a city museums. And also it's big museums in another like stadium, completely gone. Completely destroyed. And it's a major tourism destination for Vietnam. That's where Halong Bay is. Yeah. So I would say always be extra careful and very vigilant.

(08:22) Jeremy Au:

Yeah, I mean, one of the interesting things is that, in Asia, back in the medieval ages, there was a mini ice age that was caused by a Southeast Asian and I think Indonesian volcano exploding called Krakatoa. It was a mega eruption. It released so much particles in the air that the whole people in Europe were like, wow, the sky has changed color. And then after that, the whole earth cooled and then there was less sunlight and then the plants died and crops failed. And then he set the foundation for like civil war revolution and disease epidemics in Europe as well. So that's interesting where all these like, there could be a super volcano explosion. It's obviously Asia, right? And I think it's,

(08:56) Valerie Vu:

Could be.

(08:56) Jeremy Au:

I mean, maybe once every 500 years, every 1000 years, but you never know. So, there you are going through this disaster and so forth. What else was happening in the Vietnam market?

(09:06) Valerie Vu:

I would say this quarter has been extremely tough for Vietnam market. Not only experienced a terrible typhoon in the past 30 years, but we also saw a few bad news for the ecosystem, like tech startup ecosystem in Vietnam. The first one relating to the first unicorn in Vietnam, VNG. Earlier in September, police very suddenly raided the VNG campus. And as a result they have to change the CEO to Kelly Wong and because the current CEO is with the police. However, the public relation team of VNG has done a really great job. And all of the article domestically about VNG got like took down in one day.

So what's the reason of this mystery investigation? We still don't know. There's a lot of conspiracies and story, theories. But I'm sure that they didn't do anything wrong. I hope so. And VNG is getting back to normal business because, right now they have an interim CEO in place already. It just caused a lot of questioning, more concerns from investor community, especially on the tech investment side.

(10:10) Jeremy Au:

Yeah. And we've talked about it in our past episodes. I think that Vietnam has a very strong set of macros around the economy. And that sets the foundation for many small businesses, including startups to grow. Of course, the tricky part is that in order for early stage venture capital to be there, they need to believe that it's growth stage venture capital and growth stage venture capital needs there to be a public market exit.

(10:29) Valerie Vu:

Yeah.

(10:29) Jeremy Au:

And I think one way of looking at it is that there is no history of there having been a public market exit for a tech unicorn and VNG was supposed to be that one that was supposed to list in the US.. And so I think that's a dampener, obviously. And of course, I think the sub factors of that is, the bare perspective of that VNG not being able to go on market is because they're concerned about political action because similar to the Chinese approach, right? It's like you have a certain governance structure and you have to list in the U. S. through a parallel listing anyway, but the legal mechanism of that is a little bit fragile, similar to the Chinese approach. And it basically requires your domestic government to be like, I'm okay with it. Which if they're not, then it kills the late stage exit potential.

(11:08) Valerie Vu:

I'm sure they will work out a solution. It makes no sense to hold the CEO for too long time. The entire tech ecosystem. It's on VNG's side and hoping that they will release the CEO.

(11:23) Jeremy Au:

Yeah. No easy answers. I mean, like I said, I've heard a lot of conspiracy theories as well. I'm actually don't really know. I mean, I think that they say some say fraud, some say political faction alignments are them say other personal items. So it's very unclear, but I think the problem I think is, opacity doesn't help I think cause in America, normally, when there's police action, there's more clarity around the reason. And so now, whether you believe it's fraud or not, for example, like WeWork, or you look at Terranos, I mean, as an example, all these different types of lawsuits, et cetera, I think they tend to name it upfront. And I think the company, the truth is the market can actually absorb bad news, actually, like the market can be like, okay, Luckin Coffee is publicly listed. And it can absorb the fact that, okay, it can be, the stock price will drop, it will be delisted, et cetera. But I think Fuzziness is actually the worst of all information states.

(12:13) Valerie Vu:

I still believe it's not fraud, but until we have clear confirmations or Answer from the government we don't know exactly why? I would prefer not to, like putting more conspiracy in their situation right now.

(12:26) Jeremy Au:

Yeah, yeah. Yeah. So I think, a lot is writing on VNG because I think if VNG doesn't make an exit eventually, then the question is what kind of unicorn can? Because VNG, we talked about a company before, it really has that, super app slash, virtual digital conglomerate, like he has all the right arms, he has a free cash flows, he has the games, he has the chats, he has the payments, he has the shopping. So it's really got, I think everything needed for a good public market story.

(12:49) Valerie Vu:

Yeah.

(12:50) Jeremy Au:

Yeah. So let's see how that turns out. So we'll discuss it next time if we get more news about it.

(12:54) Valerie Vu:

If we get more clarity.

(12:55) Jeremy Au:

Yeah. And then you were discussing about a stock market as well, right?

(12:58) Valerie Vu:

I think before we move into stock market, one more news that I would like to discuss is another major startup player left Vietnam, which is Gojek. So right now the ride hailing market in Vietnam is getting very consolidated. So last year was like, they mean leaving Vietnam and then this year is Gojek, even though they have been in the market for six years, and invested quite a lot. I'm pretty sure they already spend over 200 million in Vietnam market. They were one of the latest international startups that announced and decided to leave Vietnam.

(13:28) Jeremy Au:

Yeah. I would say, I mean, I don't think it's really bad news for Vietnam. I would say it's more like it makes sense for Gojek from my perspective. Gojek, if you look at the public financials, they are listed on IDX. They're still burning a lot of cash. And so Vietnam as a market has been profitable really for either Grab or Gojek as a market because of it's fast growing GDP per capita, but it's still relatively low, which means pricing power is low. Then you have a lot of people competing. This is how to raise prices. I think everybody's been losing money in the Vietnam market. So it was really like Grab versus Gojek, seeing who can stay longer.

And I think he goes back and I was talking to a former Gojek employee and he was basically saying that as an executive, they knew that Vietnam wasn't a good market for them because they felt like there's more to do in Indonesia. They need to focus their technology and their resources. And Indonesia is big enough as a market. With 200 million people, you just got to build more business lines. But I think they really wanted a regional story, to talk to public market investors. Similar to Grab, because then that's how you get U. S. interests, etc. And so they felt like Vietnam was a good fit. So I think going in was really to help them fundraise. I was quite proud of the story, but whether I think everybody knew coming in that it was going to be difficult to get the ROI on it.

And then once you're in, it's actually quite hard to get out. I think there's a story for a lot of markets, for a lot of startups. It's like, if you're in a market, it's quite difficult to get out because you lose face, you're explaining to people blah, blah, blah. So you end up a lot of sunk costs. But if you ask me, I think it's the right call. They already pruned back. So they sold Tokopedia to the ByteDance team. Then they are letting go of the Vietnam business unit. So I think we're really focusing on the core units they have in Indonesia.

(14:55) Valerie Vu: Yeah. So, we have a lot of ride hailing and food delivery player who already left. So Uber, and most recently Gojek.

(15:02) Jeremy Au:

Yeah. I mean, I think food delivery and rice were basically subsidized by all these Singaporean, American, and Indonesian capitalists. I mean, if you look at it, it's like $200M spend on the Vietnam markets, basically a 200 million subsidy to the local market for competition and so forth.

(15:16) Valerie Vu:

Yeah. So, it will be interesting to see where Grab can actually eventually dominate the entire market. So right now they almost like 50%, and the rest of the market is divided between Be and, Green SM, which is the subsidiary owned by VinFast. My hypothesis is Be and VinFast will collaborate even further. Maybe push, like Grab will be another, we'll have another tough battle with domestic players.

(15:40) Jeremy Au:

I think so. I think if you look at most of these markets, it goes back to it. It's just like, the tricky part for companies to go regional is that at the end of the day, a Vietnamese government may look at this as a Singaporean company, and so, all your domestic competitors may look at this as a foreign competitor. And so, it's not like America where it's like Uber can grow from San Francisco to New York and then from New York to Utah, like it's still an American company, even though it's from a different state. So I think, like competition, but let's see how it goes. I mean, even if Lyft and Uber is still a dual poly, but once you have network effects, it can be quite strong, and hard to break those network effects.

Uber is slowly killing Lyft right now just because it's larger. So I think there's a chance that Grab and we'll be leveraging his network effects and technology stack just to push. So it'll be interesting to see how it turns out, but I think there's enough space for two players in a market.

(16:24) Valerie Vu:

Yeah.

(16:25) Jeremy Au:

I think it makes sense.

(16:26) Valerie Vu:

Yeah. Yeah. Yeah. But if VinF ast, like shake hand further, I think there will be two, but there will be like two domestic players.

(16:32) Jeremy Au:

Yeah. It would just end up being like Grab versus some domestic super alliance. I mean, I think that's makes sense. I mean, it's consolidation. And then, we already know that for a while, everybody in Asia knew that consolidation is happening. I mean, even Grab and Gojek supposedly in secret discussions to potentially merge. Of course, the problem is there's a secret discussion, but obviously everybody is leaking into the news.

(16:50) Valerie Vu:

That talk has been ongoing in Telford. Several years.

(16:53) Jeremy Au:

Yeah. Well, SoftBank had wanted them to merge a long time ago. They invested in both sides. And I think it made sense, years ago for them to merge because consolidated, they both would have got a nice payout at that time. And then they would have been able to raise prices.

I think the deal made sense back then but obviously, the individual negotiating teams couldn't come to agreement, right? So be it. But let's see I think this time around is a little bit different, like high interest rates, it's hard to get external funding.

You know, these are public market companies. Grab's still run by the founder, Gojek's being run by a professional CEO who's really on top of it. But there's less personal, rivalry slash history that sense. So maybe this time around something could happen, but I think I'll be very interested to see what the regulators will say for Grab and Gojek merging. It wouldn't matter for Vietnam because Gojek already exited, but I think Indonesia regulator and Singapore regulator as well, probably have a lot to say.

(17:40) Valerie Vu:

So it'll be a shake hand of two countries instead.

(17:44) Jeremy Au:

That's the most important conversation. It's between the two regulators actually. I'll say whether that's doable because every merger is not an equal merger in life. So it depends on who's on top, I think.

(17:52) Valerie Vu:

Yeah. I guess regulator has been more difficult in a lot of M&A transactions, at least in the US side.

(17:58) Jeremy Au:

I think the regulators are also an issue in Southeast Asia. I mean, this is that, are you working on domestic action? Because you're linked to the local politics. Or whether it's anti foreigner action. So, we saw Indonesia also had 200% import tariffs on Chinese manufactured goods because, the middle class is shrinking right now.

(18:15) Valerie Vu:

I'm interested too.

(18:15) Jeremy Au:

Yeah. So as Gita and I, who's another cohost, we'll be discussing that at a past episode of ours. But I think the tricky part is like, you have all these external economy shocks that we all face, inflation, supply chain disruption, China's plus one, Vietnam is benefiting from China's plus one but for countries, like Indonesia, there's a lot of Chinese manufacturers are trying to export to Indonesia, then it's hard to compete. How do you make a pot cheaper than the Chinese factory now? I just think it's impossible. So, you have your nice little middle class lifestyle with a small factory and it's getting killed by Chinese pots, I don't know. Not an easy policy debate.

(18:49) Valerie Vu:

Yeah. In terms of better news., Vietnam stock market and financial market have been trying to upgrade ourselves from frontier market to emerging market because right now MSCI and FTC are still classifying Vietnam stock market as a frontier market. So that kind of limit a lot of foreign public equity investors. This, this year alone, the outflow of for a foreign market form, like stock market in Vietnam, like the outflow of foreign investor have been almost like 2 million. Yeah. So everyone have been talking about when are we getting upgraded to emerging market status? And the good news is it might be coming really soon. Maybe even like 2025 or early 2026 because the ministry of finance just made a major approval that foreign investors don't have to pre-fund their account before making a purchase in Vietnam public equities before they have to have like the money in the bank account, like they have to pre-fund the account before making the purchase decision. So, a lot of investors might take foreign exchange risk. If they end up not buying the securities. So that stopped a lot of foreign investor from buying stock in Vietnam. But yeah, Ministry of Finance just approved that, Hey, if you want to invest in a Vietnam stock market, you don't need to pre fund your account anymore.

So that's a major lifting and would be in place in November this year. So that's also a major lift that helped us become candidate for this, market upgrade finally to take place in 2025 or early 2026, to be recognized as the emerging market. And ministry of finance also have a lot of ambitions. So right now, the market capitalization of Vietnam stock market is below a hundred percent of our gDP. They want next year, the market cap of Vietnam to be a hundred percent GDP. And by 2030, it's going to be at least 120%. So they want to grow the financial market, making they want to make like Vietnam financial market more transparent. Of course, more liquidity as well. We're trying to encourage more foreign investors to coming in, not just invest in infrastructure project, but also stock market, public equity market, making the financial market in Vietnam more mature.

(20:57) Jeremy Au:

I think that the Asia Partners actually has done a great report where did they chart that out? Like imagine like a chart on one axis is very much like the country's GDP growth rate. And the other axis is the stock market growth rate. And what they shared is that, historically, for example, Vietnam and China, the stock market, has grown slower than the GDP growth rate, which means the proceeds or the net transfer of growth, the majority of that proceeds didn't go to the stock market.

They went to the businesses or consumers or workers, private, and so I think, from that perspective, they contrasted it against other Southeast Asian countries, but more like the U. S. and other countries. So I think there's a point of view and we'll put those charts into the transcript for people who want to check it out at bravesea.com. But I think the crux of it was just that this report was basically saying, you need to have that financial maturity to have that, but it's also a government regulator decision, which is, do I want to have proceeds go to the stock market? But of course, the benefits supposedly of giving those proceeds to the stock market is that the stock market will absorb and bring more foreign direct investment and more local retail investment into your public company.

So it's supposed to be, a virtual cycle, but obviously it's still a It's almost like a governance. Do you believe in capitalism? Because if you believe in capitalism, then that's the stock market and the classic western style approach, right? London, New York, stock exchange. Actually in Singapore, the stock exchange has not been doing well either.

So I think the Singapore Stock Exchange has been doing a lot of work. The Singapore Venture Capital and Private Equity Association has also been working very hard to propose recommendations and set up a task force, to advocate, for the Singapore Stock Exchange, because the Singapore Stock Exchange is kind of like, unfortunately, like a lot of domestic startups, they're not listing in the Singapore Stock Exchange.

(22:34) Valerie Vu:

Is that like this because they cannot meet the requirements or there's no liquidity?

(22:39) Jeremy Au:

Well, it's like a chicken and egg, so, I think if you think the perspective of I think startup founders that hit a certain piece, I think what they're saying is, And you got to grow in a way and you're burning cash for quite a while.

And then you want to go to the stock market when you're ready to raise money. I think the simple fact is that actually, New York is hard to beat. And everybody in Singapore can invest in a Singapore, account to invest in America, et cetera. So there's nothing stopping a Singaporean retail investor from investing in the U. S. Does that make sense? So it's actually a perfect competition piece. It's less about Singapore being weak to some extent, but more like, America is so strong with so much liquidity, so many market analyst reports, et cetera. So there's a lot there. So I think we recognize that primarily America's stock market is very strong and there's no liquidity barriers between Singapore and the U S.

So I think that's the first piece, but I think the second piece is that from a final perspective, the way they would argue it is like, if I'm going to IPO, I might as well IPO the U S and if I have the IPO in the Singapore stock exchange one stage before the restrictions are too high. And the liquidity is not worth it for me to go IPO on a Singapore Stock Exchange one stage earlier. And I think that's where a lot of the debate is happening right now because if you list those companies at the 200 million, 500 million, 1 billion valuation, which is a bit small for the US stock market, then you need to create a local industry of banking analysts who can write initiating coverage reports similar to the US, then you need to get people to set up and explain unique strong CFOs that can hit the ground running and explain that story to people.

And so that's it as a whole. ecosystem and only the government can really do that work because you're basically saying I'm going to subsidize or encourage banks to write reports about locals and about companies. And because without that market information, how would somebody from the region feel comfortable investing in a Singaporean company at a 500 million valuation.

(24:19) Valerie Vu:

Yeah.

(24:19) Jeremy Au:

That's losing some money. So I suppose the Singapore Stock Exchange has a catalyst, which is supposedly for smaller companies, but, so it's like 90 heard all there. And I think the Singapore government and the ministers have virtually said they are setting up a roundtable or task force to figure out what to do.

(24:33) Valerie Vu:

I think that's necessary. Like I said, it's also like a discussion of a new mandatory requirement that companies, regardless of the side, when they are listed in the stock exchange in Vietnam have to file in both English and Vietnamese. So right now, some smaller size, like are exempt from having both languages. So they only have Vietnamese filings. It's a step up for us and I think it's necessary.

(24:55) Jeremy Au:

Yeah. Because if it's not in English, then let me throw it to ChatGPT, the ChatGPT hallucinated, add an extra zero.

(25:01) Valerie Vu:

But also keep in mind, Vietnam stock market has opened up for the first time in 2000.

(25:06) Jeremy Au:

Yeah.

(25:07) Valerie Vu:

So it's still a very young market, financial market.

(25:10) Jeremy Au:

And I think the Singapore Stock Exchange has to move faster because, if the Vietnam Stock Exchange is liberalizing, then last time, historically, there were some regional listings that were on the list in Singapore. But now if you're Thai, you might as well just do it in the local Thai Stock Exchange, right? Which actually quite a lot of Thai companies are listing the local Thai Stock Exchange which is quite an interesting path. So they're listing at a, 50 mil, a hundred mil, smaller basically then, but I think the Thai local scene from what I've heard, Wing was a cohost kind of shed about, it's just like a lot of the local Thais, they actually find it hard to access the US stock market as well. So they're investing in a domestic stock market. So there's a lot of capital and wealth flowing around.

So it supports a domestic listing. So a Thai company can list to Thai and it makes sense. A retail investor in Thailand would be like, Hey, I can, I understand a company, right? It's an F&B chain that sells Thai dessert, right? Which is a realistic that happened then people listed and then people invest in it domestically, right? So why would a Thai company come to Singapore to list now? So soon if you and I mean, that's a good job to stock exchange the Vietnamese company would be like, you know what, I would just list on the Vietnam stock exchange.

(26:08) Valerie Vu:

Next step for that to happen if they need to remove their profitability requirement.

(26:12) Jeremy Au:

Oh, you should talk about profitability and requirement. There's a lot of crazy rules. What is the profitability requirement?

(26:17) Valerie Vu:

Oh right now, if they are not profitable, they cannot be listed.

(26:20) Jeremy Au:

Yeah. I think that's also the Singapore rule, obviously the catalyst, which is the sub listing has a different set of rules. It's a different set of restrictions that make it almost equally as difficult. Does that make sense?

(26:30) Valerie Vu:

Yeah.

(26:31) Jeremy Au:

So as a result, people are like, Hey, I can be losing money and larger on the U. S. stock market. I might as well go there instead I have to be profitable on a stock exchange or I can be unprofitable, but it has such a crazy set of, metrics from the founder's perspective.

I might as well just eat two more years and grow into the U. S. one, right? Anyway, so, but then again, I'm still quite sympathetic to regulator, right? Because even a simple stock exchange or any stock exchange, most of the investors are retail investors. They're not sophisticated or financially literate.

In the same way as an accredited full investor would be, right? So it looks quite bad actually, if you list a company that's losing money, that everybody's like, wow, this pops, 100%, 200%. And then the company collapses in three years. Like, you're actually destroying some of the wealth of your local retail investors. So I understand the regulators dilemma.

(27:11) Valerie Vu:

Yeah, we are making reforms and transformation to the financial market. So, I think it's still long term. And we got to stay patient. Even though there's been a lot of outflow from the stock market, this year, especially, I think they'll come back eventually.

(27:26) Jeremy Au:

Okay. On that positive note, let's wrap up and I'll see you next month.

(27:29) Valerie Vu:

Thanks, Jeremy.