Share items put under control

Six share items have now been put under control by the HCM City Stock Exchange (HOSE) as the listed companies had minus business growth rates in 2008. The information has not really surprised investors as they well know that a lot of listed companies suffered losses last year.

HOSE on February 9 announced the names of four more companies which will see their share items put under control, raising the number of share items in such a state to six.

One of the six is Bach Tuyet Cotton Company, whose name has appeared regularly in local newspapers recently. On July 11, 2008, HOSE announced that Bach Tuyet share (BBT) transactions were being interrupted due to the company’s losses.

BBT shares were put into transaction again on September 29, 2008. However, only transactions under the mode of periodic matching orders have been allowed, negotiated transactions have not.

Another name on the list is Tribeco, a drink producer. Tribeco’s shares (TRI) were put under control on February 3, 2009 due to the company’s minus profit in 2008.

The announcement of the two share items put under the control of the state watchdog at that time did not rouse the public much, as investors knew many companies had lost money in the fourth quarter of 2008. Moreover, TRI’s poor ‘health’ would not so significantly impact the market that it could cause a ‘wave of worry’ among investors.

However, on February 9, the HCM City bourse unexpectedly announced four more share items would be put under supervision.

It is quite a surprise that the four new share items include REE, a refrigeration engineering company, one of the two leading companies on the stock market and previously considered a blue chip.

REE has announced the loss of VND9.72bil for the four quarter of 2008 and the accumulative loss of VND139.34bil for the whole of 2008.

The three other share items are Vitaly (VTA), Bien Hoa Sugar Joint Stock Company (BHS) and VHG, a production and investment company.

Will the list get longer?

Hoang Xuan Quyen, Analysis Director of Tan Viet Securities Company, said that “the announcement by HOSE has not surprised anyone, it has just confirmed the worries of investors.”

Meanwhile, Dr Nguyen Duc Thanh, Director of CEPR, an economic policy research centre under the Hanoi National University, believes that there will be more share items added to the list of share items under control.

Sharing the same view, Le Chi Phuc, Head of the Analysis and Consultancy Division under VNDirect, said that six share items will not be the final figure. He said the list will be longer after all listed companies have submitted their financial reports.

Regarding the reasons for the company’s losses, Phuc said that the companies lost money primarily due to unsuccessful financial investments and loans with overly high interest rates in 2008.

Phuc has warned that the turnover of many listed companies may decrease in the first and second quarters of the year, as partners may cancel contracts, refuse imports or be slow in making payments.

 Vietnamnet

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