Many companies have decided to list shares on the bourse since the beginning of the year. Experts say that the enterprises are entering the bourse in order to have more channels to mobilize capital. Meanwhile, investors are pleased with the listings because the market has more ‘commodities’ for them to choose.
Just within the first five months of the year, 35 companies have listed their shares on the HCM City bourse, and over the last week alone the HCM City Stock Exchange (HOSE) has welcomed the shares of six companies. Currently, 236 share items are listed on the HCM City bourse, with the listing value of 114,110 billion dong.
In Hanoi, 32 companies have listed their shares on the Hanoi bourse since the beginning of the year, raising the total number of share items listed to 296 so far, with a total value of 41,268 billion dong.
Many companies have applied for listing their shares in Hanoi and HCM City. HOSE has received 30 applications, while the Hanoi Stock Exchange has got 56 applications.
As such, both the Hanoi and HCM City bourses have seen 67 companies listing their shares over the last five years, a high figure if noting that only 121 companies listing shares in the whole year 2009, including 72 companies listing in Hanoi and 49 in HCM City. If counting on the new applications, the number of companies to list their shares in the next several months may reach 150, an increase of 24 percent over the previous year.
According to Le Anh Thi, Deputy General Director of Au Viet Company, many companies have decided to list shares on the bourse lately because of increased confidence in the stock market’s stability. High bank lending interest rates have also prompted enterprises to seek capital in the stock market.
“The plans of enterprises to list shares on the bourse all have been associated with the plan to issue shares to increase capital,” Thi said.
In the meeting with investors to introduce the share listing of Dai Thien Loc Steel Company, Nguyen Thanh Nghia, Chairman of Dai Thien Loc said that after listing shares on the bourse, the company will issue shares to existing shareholders in order to raise funds to for the Song Than 3 Industrial Zone project in Binh Duong province.
Nghia said that the company has contacted banks to ask for the loans for the project. However, if the company can mobilize capital from other sources, this will help the company ease the financial burden of the project.
Also according to Thi, more and more companies are deciding to list shares on the bourse these days because of the law which stipulates that public companies must list their shares either on UpCom (The market for unlisted public companies) or on the two official bourses.
Tran Anh Dao, a senior official from the HCM City Stock Market said that she cannot see any possible negative impacts from listing many companies on the stock market.
The director of a securities company also said that the market now needs many more new shares in order to provide more ‘commodities’ to the market, thus bringing more choice to investors. Though many new shares have been listed on the bourse, he still thinks that the market now needs more shares from big general corporations and groups such as Sabeco or MobiFone as well.
Huy, a securities investor, also said that it is a good thing for companies to list shares on the bourse, because this helps improve the liquidity of shares.