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Share sales back in favor after market rally
The stock market’s recent rallies have encouraged joint stock companies to retrieve shelved plans for initial public offering (IPOs) and additional share issuances, an analyst said.
The VN-Index of 156 leading firms and four closed-end funds last month rose more than 19 percent to become the world’s best performing stock exchange in August.
Around 116 investors bought 3.8 million shares in the public float of Agribank Jewelry Company on the Hanoi Securities Trading Center last month, with the number of bids three times the number of shares available.
According to the Ho Chi Minh Stock Exchange (HOSE), many IPOs and new share sales will be carried out in September and October, in contrast with July when no new stocks listed on the exchange.
According to HOSE announcements, in September and October Hydropower Corp No.4 will float 1,550,000 shares, drug maker Pymepharco more than one million shares, construction firm February 3 more than 5.5 million and food firm Duyen Hai 3.1 million
The government put many equitization plans on hold during the market free-fall in the first seven months of the year. Despite rally in August, the benchmark VN-Index is still 45 percent down this year.
State-run enterprises, such as cellular phone service provider MobiFone, Mekong Housing Bank and the Vietnam Bank for Industry and Trade, have been allowed to sell shares to strategic partners as their first part of their equitization plans. The enterprises will conduct IPOs at a later date.
Some firms are now reconsidering their additional share issuances. Book supplier Phuong Nam Culture
Joint Stock Corporation is seeking shareholder approval to increase its planned sale of two million shares to 3.5 million.
Nguyen Ngoc Tuoi, an official from Kim Eng Securities Company, said issuing shares to raise money was often necessary. But Tuoi warned that the issuances would not be effective if all listed firms sold shares at the same time.
He also said institutional investors and those who were too busy to follow the market’s day-to-day moves would be the main participants in IPOs and the new share issuances.
Thanhnien
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