A lot of companies, which got the approval in principle from the State Securities Commission (SSC) to list their shares on the bourse, have decided to cancel the share listing plans, because the market remains too gloomy, which is really not a suitable time to make debut. The management boards of many companies have asked to delay the listing plans, even though the plans were approved at the shareholders’ meetings already, also because of the gloomy market.
However, many companies still move ahead with their plans to list shares. By the end of October 2011, the Hanoi Stock Exchange had received 49 applications for listing shares on the bourse. During that time, 28 new shares appeared on the stock exchange.
Meanwhile, the HCM City Stock Exchange has accepted the listing of 15 companies’ shares, while 20 companies had applied for listing so far this year.
Though the year 2011 will end after three months, some companies still reportedly hurriedly follow necessary procedures to be able to enter the bourse prior to the 2012’s beginning.
It is expected that Lafchemco, a fertilizer production company, would make debut on the Hanoi Stock Exchange in November. With the chartered capital of 540 billion dong, Lafchemco plans to list 54.05 million shares on the bourse. The company, which has got the approval in principle to list shares, has urged the consultancy firm to speed up to fulfill necessary procedures.
Lafchemco plans to obtain 3900 billion dong in turnover this year and 225 billion dong in post tax profit which would allow it to pay the dividend of 15 percent. Though the company has not made public the finance report for the third quarter of the year, sources said that the accumulative post tax profit by the end of the third quarter of the company has exceeded the 200 billion dong threshold.
When asked why Lafchemco still decides to list shares at this “sensitive” moment, a representative of the company said that the board of management wants to fulfill the plan approved before at the shareholders’ meeting. Despite the big difficulties in 2011, Lafchemco still obtained satisfactory achievements in the first 9 months of the year.
“The market has got better and we believe that it is now the right time to list shares,” he said.
Most recently, the Hanoi Stock Exchange on October 31 received the application for listing from PDP JSC, an investment and construction company, which provides real estate consultancy, auctioning and construction services. With the chartered capital of 430 billion dong, PDP plans to list 43 million shares.
On November 1, the HCM City Stock Exchange officially welcomed MBB – the shares of the Military Bank which is always considered a “valuable commodity.” On November 3, the stock exchange received HU1 shares of HUD1, an investment and construction company.
The most important reason that encourages companies to continue the plan to list shares on the bourse is the commitment made by the boards of management before shareholders.
It is clear that the listing would help the companies’ shares improve their liquidity. Therefore, once shareholders approve the listing plans, the board of management needs to fulfill the plan, under the pressure of shareholders.
Besides, despite the big difficulties of the national economy, the enterprises with big capital and healthy capital situation still can have good business results. Therefore, they believe in the attractiveness of their shares and still move ahead with the listing plan.
While analysts have predicted the continued difficulties for 2012, a lot of companies, after considering their positions on the market, still believe that the picture of the national economy would be brighter in the next year. Meanwhile, it always takes 6-9 months to follow the procedures for listing shares; therefore, they believe that it is now the right time to start the plan on listing shares.
Hoang Thanh Tuan, a senior executive of Sao Viet Securities Company, said that the determination of the companies to list shares should be seen as good news, because the listing would bring benefits to the market. The increase of the market capitalization value would make the market more attractive to lure foreign capital.