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Tightening the supply of shares
There have been signs that show that state management agencies are trying to limit the supply of shares since the Prime Minister released the instruction on strengthening management methods to ensure the sustainable development of the stock market.
Sacombank is following necessary procedures to postpone issuing shares to increase capital in 2008. Sacombank previously planned to raise at least VND1,400bil from the bond issuance.
Prior to that, another joint-stock bank was not allowed to issue VND50bil worth of preferential shares to its staffs; it was only allowed to issue shares to pay dividends.
Bankers believe that the State Bank of Vietnam is trying to tighten the activities of commercial banks to call for more capital by issuing shares.
Recently, the Ministry of Construction asked its affiliate enterprises and the Vietnam Cement Corporation to check securities issuances. The officials, representing the state’s capital in joint stock companies, must supervise capital mobilisations from the stock market. If the securities issuance proves to be really necessary, the issuance plan must be reported to the ministry and the Ministry of Finance.
The Steering Committee on Enterprise Renovation and Development has recently sent a message that state-owned enterprises can still complete equitisation without making IPO.
The happenings all have made people think that state management agencies are trying to tighten the supply of securities on the market. The moves have been made since the Prime Minister released the instruction on strengthening management measures to ensure the sustainable development of the stock market.
The Ministry of Finance has said that it would build up a plan on the total monthly supply of securities in order to ensure supply and demand balance.
Analysts believe that controlling the supply of securities is a necessary thing. The state has put a lot of good commodities onto the market recently, including Vietcombank, Habeco and Sabeco shares. However, the market has undeniably been suffering from indigestion.
The analysts have also pointed out the sale of preferential shares to good staffs in companies could bring misfortune if the shareholders dumped the shares onto the market, even though they might have promised to keep the shares for a certain time.
Similarly, consecutive share issuances can also make investors dizzy because they have to arrange money all the time to purchase shares. Big IPOs have also helped sink the market as every big IPO attracts several billion VND from investors.
VNN
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