The stock market is heating up again, with more and more companies listing their shares on Vietnam’s two bourses in 2010.
According to Dau tu chung khoan, the HCM City Stock Exchange and Hanoi Stock Exchange had received 60 ‘new comers’ by June 2, 2010. At the same time, the number of companies applying for listing shares on the bourse has been increasing. The stock market initially expected to see 100 new share items listed on the bourse this year, however, analysts now predict that the actual figure will be much higher than 100.
According to Tran Thi Anh Dao, Director of the Listing Department of the HCM City Stock Exchange, 35 companies have applied for listing on the bourse and are awaiting the final decision from the stock exchange. These include companies that have vast chartered capital levels ranging in the trillions of dong, such as Military Bank (5300 billion dong) and Petroland (1000 billion dong).
Dao said that HOSE has approved in principle to the listing of eight companies, while it is expected that some 10 companies will ‘enter the bourse’ in June 2010.
According to Dao, the number of companies that have listed shares on the HCM City bourse so far this year has reached 30. These include the companies with large chartered capital like Dai Duong Group, which has 2500 billion dong in chartered capital, CMC Group (650 billion dong) and Pomina Steel (1630 billion dong). HOSE has just received applications for listing from Duc Long Gia Lai Group (Which has registered to list 29.1 million shares), and Ninh Hoa Sugar Company (Which has registered to list 8.1 million shares).
Regarding the quality of ‘commodities’ on the stock market, the Vietnam Association of Financial Investors (VAFI) believes that in order to make the stock market more attractive, it is necessary to set higher requirements on the companies which list shares on the bourse. Currently, companies must have a minimum chartered capital of 80 billion dong to be eligible for listing on the HCM City bourse. Meanwhile, VAFI thinks that the required minimum capital should be raised to 120 billion dong instead of 80 billion dong. The association believes that it is not a difficulty for the enterprises, which have good corporate governance, to have more than 100 billion dong in chartered capital.
VAFI also said that the ratio between the post tax profit on chartered capital of the three years before listing should be between 20 and 25 percent and higher.
As for the Hanoi bourse, which always sets lower requirements than the HCM City bourse, according to VAFI, the required minimum capital should be more than 40 or 50 billion dong and the ratio between the post tax profit on chartered capital should be 10 percent and higher.
According to the HCM City Stock Exchange, the fact that many companies apply for listing on the bourse should be seen as good news that shows the stock market heating up. In fact, this is exactly what the watchdog agency wants public companies to do: Eligible companies list their shares on the Hanoi and HCM City Stock Exchanges, while other public companies put their shares into transactions at the UPCoM market (The market for unlisted public companies).
According to the Hanoi Stock Exchange, by June 2, 2010, 32 more companies had listed their shares on the Hanoi bourse. These include many big companies including VnDirect Securities Company (450 billion dong), Au Viet Securities Company (360 billion dong), Rong Viet (330 billion dong) and Vinaconex Tourism Development (300 billion dong).
The Hanoi Stock Exchange has also approved in principle the listing of 5 million shares of Dong Nai Port Company, as well as the listing of 2.5 million shares of Sam Cuong Electricity Materials and Telecom. It is estimated that 30 companies have applied for listing and are awaiting the approval from the Hanoi Stock Exchange.
It is expected that nearly 10 companies will list their shares on the Hanoi bourse in June, the same number as May. As of June 2, 2010, 531 companies currently listed their shares on both the HCM City and Hanoi bourses, combined.