Capital pressure on stock market gets heavier

Statistics of a securities company showed that according to the 2010 plans of the listed companies, from the end of this year, the amount of capital that they need to draw on from share issues is estimated at about 9.8 trillion dong, while the capital increase plan of commercial banks is expected to reach a total of 34 trillion dong.

Thus, the pressure of capital on the securities markets is very heavy and the possibility for the market’s indices to increase is very difficult.

Most listed companies have made plans to issue shares in 2010. This time, the market is still in a pretty good period. However, the markets are showing signs of decline; many companies have offered high share prices so it is difficult for those companies to raise capital as expected.

HCM City Investment and infrastructure Development Corp (CII) launched its plan to issue shares at 3:1 ratio, with the price rate equivalent to 30,000 dong per share. The closing price of CII shares on May 24 was 38,900 dong per share. If closing the list at this price, the price of CII shares would be back to 36,600 dong per share. The difference between the price after the closure of shareholders list and the current price is not too big. Therefore, the success of the plan after the ex-date will likely be very low.

Sacombank also plans to issue shares to pay 2009 dividends of 15 percent and issue 15 percent additional shares issued with a price of 12,000 dong per share. The closing price of CII shares on May 24 was 21,000 dong per share, the STB share price after the ex-date would be 17,000 dong per share. If after the ex-date, the stock price fell down, it would be difficult for shareholders to make the right purchase price of 12,000 dong per share, which the STB has planned.

“Although the market will go down, which will make difficult for the plans to issue shares by listed firms. From the investor’s perspective there is a chance for them to know the threshold at attractive prices to accumulate shares and wait for good information that companies will announce to hold, by which companies want to issue bonus shares. If there is no good information, the risk of failure in issuing shares is very high,” a financial specialist said.

“It is certain that there will be movement of capital from one place to another and investors will have to consider their investment portfolios. That was the main reason to make the market find difficult to increase strongly in near future “, said Le MBA Dat Chi, a lecturer of HCM City Economics University. According to him, if not considered, investors will suffer losses twice.

Specifically, many bank stocks are priced at lower than the face value of 10,000 dong per share.

Huynh Anh Tuan director of SJC Securities Co. said that the share issue of listed companies and banks is very difficult when the stock market is falling sharply. For listed companies, if the capital increase is not considered urgent, and in better conditions, they may consider borrowing bank loans.

Nguoi lao dong

Tags: vietnam stock, Vietnam stock market

Posted by VBN on May 25 2010. Filed under Stock. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry