Securities investors will have more choices for their investment portfolios, since the volume of new shares to be listed on the bourse is expect to be three times higher than 2009.

Securities investors will have more choices for their investment portfolios, since the volume of new shares to be listed on the bourse is expect to be three times higher than 2009.

Firms fail in bid to list shares overseas

Call for stricter listing requirements

Banks moving to list shares on HCM City exchange

Securities investors will have more choices for their investment portfolios

In April alone, the HCM City Stock Exchange HOSE approved the listing of nearly 30 businesses. In the first 20 days of May, HOSE saw 12 more businesses list their shares. On May 21, 20 million TNT and SPM shares made their debuts on the HCM City bourse.

The Hanoi bourse also welcomed newcomers last week, including DLR (the Da Lat Real Estate Company), KHB (Hoa Binh Mineral Company). Others have applied for listing, including Nam Hanoi Housing and Development Corporation, Ben Thanh Service Tourism and Hung Dao Container. Thirty three million VDS shares of Rong Viet Securities Company will join the Hanoi bourse early this week, May 25.

Analysts have predicted that the supply of shares will continue increasing. Many banks are issuing additional shares to increase their chartered capital to three trillion dong by the end of 2010 as instructed by the State Bank. Kien Long Bank, for example, plans to issue 100 million shares at the face value of 10,000 dong per share. Dai A Bank plans to offer 200 million shares.

Petrolimex Bank has also plans to issue more shares to raise its chartered capital to two trillion dong in 2010, and covert 1000 billion dong worth of convertible bonds into shares in order to raise its chartered capital to three trillion dong by March 2011.

According to Dr. Le Tham Duong from HCM City Banking University, in 2009, with the economic crisis, only 2.5 percent of capital needed was mobilized through the stock market, while 97.5 percent was provided by commercial banks. However, with the 2010 economy recovery, many businesses decided to take full advantages of the bourse and mobilize capital though the stock market.

The listing of more shares will lead to an abundant supply for the market, and higher market capitalization value, which also means more investment opportunities.

According to Duong, the dark side is that the abundant supply will lead to so-called “share dilution.” For example, 20 banks need to increase their chartered capital by two trillion dong, and each plans to issue shares to mobilize capital. This means that 4 billion in bank shares will be put into transactions. When the supply increases and the demand remains unchanged, the price of the shares will decrease.

Duong can also see positive effects in listing new share items on the stock market, because it means that the equitisation process in Vietnam is on the right track.

Hung, an investor on Bao Viet securities trading floor, also views it as good news. “When businesses list their shares on the stock market, investors will be able to know better about enterprises and find it easier to trade shares on the bourse than in the OTC market.”

Having decided to list shares in July, Sacomreal Chair Dang Hong Anh is optimistic about the listing plan. The real estate firm hopes that it will help mobilize medium and long-term capital and improve its shares’ liquidity.

Nguyen Ho Nam, Chair of Sacombank Securities Company, maintained that the current debt crisis is not as big as that which took place in the US and Europe, so it has not had a huge impact on investors’ feelings. Nam believes that it is reasonable to list shares on the bourse at this time.

Sixty businesses have listed on the bourse so far this year, while financial experts believe that the number may double or triple that of 2009.

Source: VnExpress