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Insurance firms promise to list shares this year
Many insurance companies have announced they will resume plans to debut shares on the stock exchange this year, including two that are scheduled to list next month.
Post and Telecommunication Joint Stock Insurance Corporation (PTI) will debut 45 million shares on the Ha Noi Stock Exchange on March 2 after more than three consecutive months of market watchdog approval. The listing will make it the sixth insurance company to list on Viet Nam's stock markets.
The company posted a net profit of nearly VND20 billion (US$952,400) in 2010, a year-on-year increase of 76 per cent, and it has set a target of VND121 billion ($5.8 million) in net profit this year along with a 15- per- cent dividend pay out.
BIDV Insurance Company (BIC), which targets total revenue of VND1 trillion ($47.6 million) this year and a 10- per-cent dividend pay out, said the Viet Nam Securities Depository had reserved the code BIC for the company while it completed procedures to list shares on the HCM City Stock Exchange by the end of March.
Petrolimex Joint Stock Insurance Company, which has delayed its plan to list for 10 years, recently announced it would list shares this year and has filed listing documents with the HCM City Stock Exchange.
Other insurance companies such as Nha Rong (Bao Long), Vien Dong and AAA have also demonstrated intent to debut shares.
Most insurance companies currently operate in the non-life sector and over 58 per cent of them have domestic investors as founding shareholders.
Last year, under the pressure of raising capital by up to VND300 billion ($14.3 million) to meet the Ministry of Finance's capital requirement for non-life insurance businesses, many companies set plans to list shares in order to mobilise capital but unfavourable development on the stock market has postponed their plans.
To date, four insurance companies have listed shares on the two national bourses, including Bao Viet Holdings (BVH), Bao Minh (BMI), PetroVietnam Insurance (PVI) and Vietnam National Reinsurance (VNR). One company- Agriculture Bank Insurance (ABI) - is listed on the Unlisted Public Company Market (UPCoM).
However, with the exception of BVH which has heavy foreign investment, the insurance companies typically decline following the general downward trend of the market despite posting positive business results.
Last year, according to statistics from the Saigon Securities Inc (SSI), insurance shares were ahead of other industries in terms of growth at 56 per cent, while the VN-Index fell about 6 per cent overall.
SSI analyst Nguyen Thi Thuy Giang said the non-life insurance industry this year was expected to grow 20-25 per cent.
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