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Stock exchange issues trading alerts
The HCM City Stock Exchange this week issued a warning to investors regarding four listed firms that posted significant losses in 2008: Bien Hoa Sugar Co (BHS): Refrigeration, Electrical and Engineering (REE); Vitaly Joint Stock Co (VTA) and Viet-Han Investment and Production Co (VHG).
Trading alerts were also issued for shares of beverage producer Tribeco (TRI), Bach Tuyet Cotton (BBT) and Binh Trieu Machinery and Construction (BTC), each of which has seen successive years of losses.
"We immediately rang the bell on these cases to alert investors who are trading in these shares," said HCM City Stock Exchange (HOSE) spokesman Le Hai Tra.
Le Chi Phuc, an analyst with VNDirect Securities Co, predicted that cautions would be issued for additional firms because the recession was still going on and a lot of enterprises were struggling.
"The losses are primarily due to the poor performance of financial investments and the high interest rates charged on loans earlier in 2008," Phuc said.
While the alerts were certain to cause some shocks, they would also give investors time to properly review their investments in such a way as to avoid suffering any major losses from these shares, Tra said.
Tran Anh Dao, head of administration and evaluation for listed companies on the HCM City Stock Exchange, said that the exchange based its decisions on the companies' own financial statements.
"We don't need to wait for audited results because it's pretty hard to turn losses into profits after auditing," said Dao.
"Investors should take note of the level and significance of the losses suffered by each company rather than panic and rush to sell them en masse," she added, noting that REE had suffered losses of VND152 billion (US$8.7 million) - mostly due to bad investments - VTA's losses had amounted to only VND2 billion ($114,285).
Investors should assess the likelihood of these business to recover, thus basing their investments on a proper strategy, Dao said. "We will continue watching these cases and update the information for investors regularly."
The alerts would be lifted if the firms submit financial statements suggesting a plan for recovery, she added, and the alert for Binh Trieu Mechanical and Construction would likely be lifted once BTC submits its 2008 financial statements.
Another 45 firms still had yet to make mandatory disclosures of business results for 2008, Dao affirmed.
"Listed enterprises have been disclosing their year-end business results since the beginning of the year, with mostly losses," said Hoang Xuan Quyen, head of the analysis department at Tan Viet Securities Co. "Where the market has gone so far has already reflected somewhat investor reactions to these financial statements. So, the alerts from the HCM City exchange are now just regulatory formalities."
VietNamNet, Viet Nam News
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