VietNamNet Bridge – The plans to list
shares on the bourse have been renewed by insurance companies which have
affirmed a stronger determination to enter the bourse this year.

Restarting
the plans to list shares on the bourse was an important part of the discussion
at the conferences summarizing business performance of insurance companies in
2010. The insurers, including the Post and Telecommunication Insurance
Corporation (PTI), were highly enthusiastic with the share listing plans in
2010, but had to delay the plans due to many reasons,. BIDV Insurance Company
(BIC) has reaffirmed their determination to list shares in 2011.

PTI has
decided that its shares will debut on the bourse on March 2, 2011. As such, the
company will officially list 45 million shares on the Hanoi bourse (Hanoi Stock Exchange HNX) three
months after it gets the approval from management agencies. After Bao Minh
(BMI) which lists shares on the HCM City Stock Exchange HOSE, Bao Viet (BVH –
HOSE), PetroVietnam Insurance (PVI- HNX) and Vietnam Re-insurance Corporation
(Vinare) (VNR-HNX), PTI will be the sixth insurance company to have shares
available on the bourse.

BIC and
PJICO are thought to be the insurers who will follow PTI’s move to list on the
bourse. Striving to obtain a turnover of one trillion dong and a profit of 100
billion dong in 2011 and have a dividend of 10 percent, BIC has also decided
that it will focus on selecting foreign partners and listing shares on the bourse
by the end of March 2011.

The plan to
list shares on the bourse has remained a promise for the last 10 years for
PJICO. After a lot of delays, the task of entering the bourse has been once
again set for 2011. To date, the application to list on the bourse has not been
made by PJICO to the State Securities Commission yet, but investors believe
that the listing plan will not be delayed once more in 2011.

Other
insurance companies such as Bao Long, Vien Dong (VASS) or AAA also announced at
their establishment that they will list shares on the bourse. However, due to
many reasons, the plans have not been kicked off yet.  Some companies announced that they would
increase their capital to become strong enough before joining the bourse.

Most of the
joint stock insurance companies are operating in the field of non-life
insurance with founding shareholders mostly being domestic investors. Seventeen
out of 29 operational non-life insurance companies (58 percent) have domestic
founding shareholders.

In 2010,
when the Ministry of Finance instructed non-life insurance companies to
increase their chartered capital to 300 billion dong, many insurers thought of
listing shares on the bourse in order to seek capital from domestic sources
instead of looking for foreign partners. However, as the stock market was
lackluster in 2010, the insurers’ plans failed. Especially, the insurers, who
have to increase capital and planned to seek capital on the stock market in
2010 were small companies which are not well known in the market. Therefore, it
was really difficult for them to call for capital from investors.

Currently,
except BVH shares of Bao Viet Group which have seen strong growth, other shares
like BMI, PVI, VNR, ABI have seen their prices decrease. There is a downward
trend in the stock market, even though most listing companies have satisfactory
business results.

In 2010,
Bao Viet’s pre-tax profit was 1.391 trillion dong, while PVI’s figure was
really impressive with 4460 billion dong in turnover. Bao Minh ranked the third
on the market in 2010 which held 11.3 percent of the market share and the
turnover of 2.352 trillion dong.

The
insurance market in general and non-life insurance market in particular, are
considered as having great potential. However, corporate governance skills
remain a problem that negatively affects business results. To date, insurance
companies have been taking losses with their insurance services, while the
profits mostly come from investments. Therefore, insurance shares are still
considered as less attractive than the shares of other companies in the
financial sector.

C. V