Until July 6, 2006, reports on the six-month business results of many listed firms showed little change and in some cases high on-year increase, the stock market continued looking down as an sequence of the two consecutive months of fall. The current price triggered big losses to many investors who bought stocks in the latest two months. Many chose to become long-term investors and wait until the price rises to the level they purchased. As a result, the supply gradually reduced. On the contrary, the market had no signal of recuperation and the buyers were also quick to invest in more stocks. Thus, the demand was also low.
In the downtrend market, foreign investors, especially influential funds and organisations, continued the buy-more-than-sell policy in May and June. In June, foreign investors bought a total of 4.2 million stocks worth nearly VND320 billion (US$20 million), doubling purchasing volume in May. In the second quarter of 2006, foreign investors spent VND578 billion (US$36.13 million) to buy nearly 7.95 million stocks but only sold 4.33 million stocks valued at VND258 billion (US$16.13 million).
Investors forecast that the market will bounce back in July when dozen of firms are waiting for listing at the Ho Chi Minh City Securities Trading Centre (HSTC). Vien Lien Joint Stock Co. (UNI) is the first to list at the HSTC in July and the 38th at the centre to date, with a total one million shares worth VND10 billion (US$625,000). The first trading session of UNI stocks took place on July 3.
Three days after that, Song Da Urban and Industrial Zone Investment and Development Joint Stock Company (SJS) listed with VND50 billion worth of stocks. On July 11, Binh Minh Plastic Joint Stock Company (BMP) will be sent its 11 shares on bourse, and on July 12, Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) will join the trading floor, ending a long wait of investors.
In addition, the State Securities Commission (SSC) granted listing licences to Vinh Son-Song Hinh Hydropower Joint Stock Company, International Food Joint Stock Company (Interfood), Vinafco Joint Stock Company, ImexPharm Pharmaceutical Joint Stock Company, Petroleum Materials Joint Stock Company (Comeco) and Chang Yih Enamelled Tile Joint Stock Company. Apart from shares of new listed firms, old firms will also issue more shares. For example, Refrigeration & Electrical Engineering (REE) will issue additional 10 million shares with denominations of VND100 billion and Vietnam Milk Joint Stock Company (Vinamilk) will issue 15.9 million new shares with denomination of VND159 billion (US$10 million).
Other existing firms like GMD, AGF, DHA, NKD, KDC and TS4 will issue bonus shares or new shares sold at the market price. With the penetration of new and additional stocks, the capital size at the HSTC will be raised to nearly VND8,000 billion (US$500 million) in July. Taking the VN-Index at 500 points, the total capital on this market will reach VND40,000 billion (US$2.5 billion).
Apart from issuing firms, securities firm and investment funds also begin expanding their capital sizes. Saigon Securities Company (SSI) will increase its capital from the current VND300 billion (US$19 million) to VND500 billion (US$31.25 million). ACB Securities Company will raise its capital from VND100 billion to VND250 billion. The Bank for Foreign Trade of Vietnam (Vietcombank) has launched the VCBF2 Fund with a total capital of US$60 million.
As regards foreign investors, at present, some 20 foreign funds are completing procedures to invest in Vietnam, notably the Vietnam Holdings Fund of Switzerland with US$110 million investment capital. The targets of foreign funds are bank securities.
Van Anh
Vietnamese
