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Stock market to see many new commodities   2009-01-13 - DTCK

Analysts have every reason to believe that the stock market in 2009 will have many new commodities. Approximately 50 applications for listing on the bourses, both in Hanoi and HCM City, have been on the table of the stock market watchdog, many of which have received approval in principle.


Explaining why so many companies plan to list on the bourse in 2009, analysts said that 2008, a year that witnessed much bitterness, was over and businesses hope that 2009 will be a better year and will bring prosperity. Moreover, businesses do not want to delay the listing plans any longer.


Earlier last week, 83 million shares of An Giang Coffee Company (AGC) made a debut on the bourse, becoming the 169th share item listed on the Hanoi Securities Trading Centre (HASTC). According to the Centre, 31 companies have applied for new listings, including the ones who submitted applications in late-2008.


AGC was the first company in the coffee industry and the first company entering the bourse in 2009. When asked why the company is still deciding to list on the bourse at this moment when the conditions on the market do not support the listing, Nguyen Van An, Chairman of Thai Hoa Group, the parent company of AGC, said that the listing has been carried out in accordance with the set roadmap, which aims to turn Thai Hoa into a public group.


An said that in the time to come, not only AGC, but other members of the group will list on the bourse.


“We do not strive for high share prices. We list on the bourse because this brings us the opportunity to appraise enterprises accurately in accordance with set standards,” An said.


In its information exposure report, AGC set some noteworthy targets for 2009, such as the turnover of VND 2,655 billion, a post-tax profit of VND 46 billion and a dividend 34.3%. These prove to be relatively high targets, if considering the business result of the company in 2008 with the figures of VND 1,981 billion, VND 20 billion and 16.9%, respectively.


The factors that prompted the company to set such an ambitious plan is that the production capacity of AGC has been improved after it put a workshop into operation, which has the capacity of 40,000 tons a year in December 2008. To date, the orders the company has received allows 60% of the production plan of 2009 to be fulfilled.


Cadovimex’s shares (CAD) entered the bourse (the HCM City Stock Exchange (HOSE) on the same day as AGC. In fact, the company received approval in principle for the listing a long time ago, and many shareholders asked the company’s leaders if the shares could be listed in 2008.


A senior leader of HOSE said that it is now dealing with nearly 20 applications for listing on the bourse, while nine applications have been approved in principle. He added that the number of enterprises applying for listing on the bourse in recent times proves to be higher than previous months.


HOSE, on the last day of 2008, received the application for listing on the bourse of the Vietnam Bank for Foreign Trade, which was equitised in 2007. The bank has the chartered capital of VND 12,100 billion, but it has just planned to list 112 million shares, accounting for 9.28% of the capital.


Investors still cannot access Vietcombank to find out the reason why the bank has decided to list, and why it only lists only a small portion of shares. However, analysts have pointed out two noteworthy things.


First, Vietcombank needs to list shares, which proves to be in line with international practice. The bank’s listing will help provide an accurate picture of the stock market and VNIndex. For a long time, the state owned capital in listed companies has come close to not being transacted, but still can make up the market indices, which has led to an inaccurate vision about Vietnam’s stock market.


Second, Vietcombank needs to list a part of shares in order to settle the problem about the ‘room’ for foreign investors. If Vietcombank lists all 1,210 million shares, foreign investors will be able to buy a very big volume of shares (Under the current regulations, foreign investors are allowed to buy up to 30% of shares in a local bank).


This may lead to the fact that foreign institutions, which want to own Vietcombank’s shares, just need to seek to purchase of shares on the market instead of having to conduct negotiations with Vietcombank. If so, the plan of Vietcombank to sell stakes and look for foreign strategic shareholders will fail to be completed.


In this case, as Vietcombank only lists a small percentage of stakes, foreign investors will only be able to purchase less than 3% of total shares.


In all cases, investors believe that the appearance of Vietcombank’s shares on the official listed market will be the good news as it brings a valuable choice to investors.

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