ID :
150494
Sat, 11/20/2010 - 15:10
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http://m.oananews.org//node/150494
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Stock market declines have forced securities companies to delay plans to issue shares
Hanoi (VNA) – Stock market declines have forced securities companies to delay plans to issue shares to raise capital this year.
Among the firms affected are Trang An Securities Co, which in looking to raise its
charter capital from 139 billion VND to 300 billion VND (15 million USD); and
Vietinbank Securities Co, that plans to raise its capital from 790 billion VND to
900 billion VND (45 million USD).
Le Ho Khoi, general director of Trang An brokerage, said the timing of the
company’s share offering would depend on market conditions.
“Companies are likely to fail if they carry out their capital increase plans at
this time,” Khoi said, adding that a share offering could only succeed if a
strategic partner had been flood.
He said that not only securities companies but also listed firms need to revise the
timing of their share issue so as not to flood the market.
“Mobilising capital through the stock exchange is posing a major challenge for
most companies at the present time, particularly in the context of tightened credit
conditions and high interest rates,” Khoi said.
Vietinbank Securities Co plans to sell more than 11 million shares, worth almost
12.3 percent of its charter capital, to a Japanese strategic partner, but its plan
will almost certainly be put on hold until next year due to unfavourable market
condiitons.
SME Securities Co, which earlier succeeded in raising its charter capital from 150
billion VND to 300 billion VND (15 million USD), also announced that it would
postpone hiking its capital to 500 billion VND (25 million USD).
Competition among securities firms for market share is fierce and small companies
are looking to raise capital to boost their financial capacity and expand, a
director of a Hanoi-based securities company said.
“However, maintaining business performance is difficult at the current time, as is
increasing charter capital,” he said.
Earlir this year, listed companies flooded the market with new shares, with the
result that supply now greatly exceeds demand, making investors hesitant to buy
stock.
The total number of new shares in the first nine months of this year reached 34.6
trillion, a year-on-year increase of 79 percent, according to the State Securities
Commission.
Meanwhile the VN-Index has declined 13 percent since the beginning of the year,
while the HNX- Index has plummeted 41 percent, with many shares losing 50-60
percent of their value.-Enditem
Among the firms affected are Trang An Securities Co, which in looking to raise its
charter capital from 139 billion VND to 300 billion VND (15 million USD); and
Vietinbank Securities Co, that plans to raise its capital from 790 billion VND to
900 billion VND (45 million USD).
Le Ho Khoi, general director of Trang An brokerage, said the timing of the
company’s share offering would depend on market conditions.
“Companies are likely to fail if they carry out their capital increase plans at
this time,” Khoi said, adding that a share offering could only succeed if a
strategic partner had been flood.
He said that not only securities companies but also listed firms need to revise the
timing of their share issue so as not to flood the market.
“Mobilising capital through the stock exchange is posing a major challenge for
most companies at the present time, particularly in the context of tightened credit
conditions and high interest rates,” Khoi said.
Vietinbank Securities Co plans to sell more than 11 million shares, worth almost
12.3 percent of its charter capital, to a Japanese strategic partner, but its plan
will almost certainly be put on hold until next year due to unfavourable market
condiitons.
SME Securities Co, which earlier succeeded in raising its charter capital from 150
billion VND to 300 billion VND (15 million USD), also announced that it would
postpone hiking its capital to 500 billion VND (25 million USD).
Competition among securities firms for market share is fierce and small companies
are looking to raise capital to boost their financial capacity and expand, a
director of a Hanoi-based securities company said.
“However, maintaining business performance is difficult at the current time, as is
increasing charter capital,” he said.
Earlir this year, listed companies flooded the market with new shares, with the
result that supply now greatly exceeds demand, making investors hesitant to buy
stock.
The total number of new shares in the first nine months of this year reached 34.6
trillion, a year-on-year increase of 79 percent, according to the State Securities
Commission.
Meanwhile the VN-Index has declined 13 percent since the beginning of the year,
while the HNX- Index has plummeted 41 percent, with many shares losing 50-60
percent of their value.-Enditem
