Perhaps, sharp plunges in market prices and illiquidity of newly listed companies on the Hochiminh Stock Exchange (HOSE) and the Hanoi Stock Exchange (HNX) gave pause to many companies with the intention of floating their shares on the local bourses.
On December 12, HOSE announced that shares (PSE) of South-East Petro Vietnam Fertilizer and Chemicals Joint Stock Company would be delisted from the primary bourse, although they were not floated because the company had not completed its listing documents with the market regulator within three months dating from the date of listing approval.
PSE is the second company to be delisted because of incomplete documentation. Why?
Low market price of new listings
Thu Duc Electro Mechanical Joint Stock Company (
EMC) floated its shares on HOSE on November 29, 2012 at the starting reference price of VND12,000 per share and EMC shares plunged to the floor price in 10 consecutive sessions (Floor price is capped at 5 per cent a day on the lower side on HOSE). EMC closed at VND6,400 on December 12.
Similarly, Vietnamnet Investment Joint Stock Company (
VNN) saw its shares decline to the floor price in seven days out of first eight days of trading with a daily traded volume of just 100 shares. On the debut day, no trade was matched (Floor price is capped at 7 per cent a day on the lower side on HNX).
Petroleum Interior Decoration Joint Stock Company (
PID) started its floating on HNX on November 22, 2012 and the biggest concern of the company was liquidity. Only four days of 14 had trades with a total volume of 1,200 shares. The market price closed at VND6,700 on December 12.
Construction Investment Corporation 3-2 (
C32) started trading on HOSE on November 30 at the reference price of VND18,000, six times higher than the last-matched price on UPCoM - the market for unlisted public companies. C32 sank to the floor in the first five days and stayed unmoved later. The shares ended at VND11,700 on December 12.
Cuu Long Seaproducts Company (
CLP) is no luckier. Starting with VND18,000 per share on the first day on HOSE on November 15, 2012 , CLP shares are now traded at VND7,300. In one month of floating shares on the primary bourse, the company witnessed one day with rise to the ceiling, two days without move, and 17 days diving to the floor prices.
Although Son La Sugar Joint Stock Company (
SLS) kept its share prices at VND27,200, the reason might lie in the illiquidity of this share. Over the past one month, only 500 SLS shares were traded, compared with its free-float volume of 6.8 million shares.
After three months on HNX, VNECO4 Electricity Construction Joint Stock Company (
VE4) only had 4,000 shares traded. Although market prices were not changed much, the shares did not catch the flow of cash because of its illiquidity.
Among new listings over the past three months, only Thien Quang Group Joint Stock Company (
ITQ - HNX), Phu Thinh Metallurgy Joint Stock Company (
PTK - HOSE), and Sai Gon Infrastructure Real Estate Investment Joint Stock Company (
SII - HOSE) had their prices higher than the debut days. Their liquidity was also good.
Withdrawal
It is noted that to list shares on HOSE and HNX, companies must be approved for listing in principle and undergo a long process of completing documentation, filing and consultancy. However, last week, two companies were forced to leave the bourse, although they had not been traded.
South-East Petro Vietnam Fertilizer and Chemicals Joint Stock Company (PSE) shares and HUD4 Investment and Construction Joint Stock Company (HUD4) were delisted because they had not completed listing documents with the market regulator within three months dating from the listing approval.
The information was released from the market regulator while the companies were silent on their next move.
Why do they do so: Dismal stock market, sharp drop in share prices after floating, or some other reason?
T.H
Vietnamese
