New Supply of Shares to Flood Stock Market

Stock investors are concerned about supply and demand on Vietnam’s stock market which will be added with a huge number of shares in near term, the state-run Laborer newspaper said.

 

According to the State Securities Commission, more than 40 companies are preparing to list their shares on Ho Chi Minh City Stock Exchange and Hanoi Securities Trading Center.

 

These applicants have a combined registered capital of nearly VND6 trillion, including big companies such as Hoa Anh Gia Lai with capital of VND1.2 trillion, Hoa Sen Group with VND570 billion, Saigon-Hanoi Bank with VND2 trillion, Phu Nhuan Jewelry with VND300 billion, and some other with capital of more than VND100 billion.

 

In addition, some large-scaled companies which have already completed their IPO also mapped out their plans to list on stock exchanges.

 

Many investors are afraid of a price dilution ahead the pressure of new share supply.

 

Nguyen Quang, an investor at Viet Dragon Securities Co., said the market experienced a plunge in the third quarter of 2007 when companies rushed to list on the market.

 

Vo Anh Tuan, head of the brokerage department of Vien Dong Securities Co., said investors are concerned about the listing of a large volume of shares in coming time, especially when the market is falling now.

 

Investor sentiment remains unstable now, therefore, this is not a favorable condition for listing at this period, Tuan said.

 

Vafi general director Nguyen Hoang Hai said the massive issuance and listing will lead to indigestion in supply and then pull down share prices. Stock market watchdogs need to control supply, while companies should reconsider their listing plans. (Laborer)