Stock market enters new capital mobilisation period

VNStockNews.com - There will be more plants and works being built and many jobs will be created as a result when joint stock banks succeed in raising capital via securities issue. The equitisation process is being restarted up when IPOs were reported with good performance.

Previously, the capital mobilisation stood still from 2008 because of the stock market slump and a lot of projects had to be delayed due to the standstill of share issues.

Meanwhile, the equitisation seemed to be brisker, On November 9, nearly 6.8 million shares of Red River (Song Hong) Corp were sold out successfully with the average winning price of 22,290 dong/share against the highest bidding price of 29,900 dong/share, higher over two times than the starting price.

Nguyen Ho Nam, general director of Sacombank Securities Co (SBS) expressed his high expectation in the firm's upcoming IPO that is scheduled on November 28, 2009 when the bidding volume was higher three times than the offering volume. Apart from 17.6 million shares being auctioned at the initial price of 15,000 dong per share, 11 million shares of SBS will be sold to strategic partners.

Earlier, since the first half of October on both Hanoi and HCM City stock bourses, IPOs have been more exciting. Van Dien Fused Magnesium Phosphate Fertiliser Joint Stock Co established a new record when the investors' bidding volume was higher over six times than offering. Some other IPOs of Lam Thao Superphosphate and Chemical Co, Vidamo Petrochemical One Member Ltd Co also reached good results.

Listed companies met more advantages as raising capital. DIG Construction Investment and Development Corp finished the selling of 10 million odd shares to 25 investors with the raised sum of money of more than 100 billion dong. HCM City Transforwarding Warehousing Corp (Transimex-TMS) after raising 31.5 billion dong continued launching the second phase sales of 2.1 million shares to mobilise extra 31.5 billion dong, bringing total raised money amount to 63 billion dong via both phases.

According to Transimex, some 63 billion dong will be invested in ICD Transimex depot centre project whereby the company's container depot area will be increased by 20 percent and the service developing capacity of ICD Transimex will surge by 50 percent from the current figure.

Before Transimex, Hoa Sen Group Joint Stock Co (HSG) announced the plan of offering nearly 12 million shares to strategic investors at a price of no less than 60,000 dong/share and one million shares to the company's employees to raise capital for Hoa Sen Phu My tole factory in Phu My I Industrial Zone, Tan Thanh Dist, Ba Ria Vung Tau province. As stated by HSG's chair Le Phuoc Vu, the investing in projects in this period will help the company reduce production costs and expand consumption market.

Similarly, other listed firms took advantages of the recovery of stock market to boost capital mobilisation for projects. Ba Ria Vung Tau Housing Development JSC (HDC) sold nearly two million shares at 20,000 dong/share, Lam Dong Food JSC offered shares to shareholders at 18,000 dong/share. Vietcombank also will raise trillions of dong in the forthcoming issue to hike its chartered capital by 9.28 percent.

In a talk with investors, a general director of construction material supply company confirmed that with much lower cost compared with the previous period, his firm still can invest in a factory with similar capacity. In addition, increasing production capacity based on the consumption demand will create opportunities for enterprises to dominate market, expand market shares in the near future. This is the major reason the leader proposed shareholders to approve the firm's share sales plan.

But, the capital raising via the stock market will be the double-edged knife if the enterprises abuse the method while their investment opportunities have not been clear.