Stocks are moving to the South of Vietnam

	Over 146 foreign investors are granted the stock transaction code
	Vietnam's stock market on track to hit $100 billion by end of 2016
	A lot of potential for Vietnam's stock market

Transaction at Maybank KimEng Company. Photo: N. Hien.

“Moving” massively

According to the Center for Vietnam Securities Depository (VSD), on November 17 2016, VSD will close the list of shareholders of the Hanoi Beer Alcohol and Beverage Joint Stock Corporation (Habeco, stock code: BHN) to transfer to BHN from UpCOM to HOSE.

Before the transfer of BHN, in late September 2016, nearly 126 million shares of CHP of the Central Hydropower Joint Stock Company were officially transferred from HNX to HOSE. The reference price in the first transaction day of CHP is 20,600 vnd per share. Earlier, CHP was listed in the top 15 stocks with the largest volume on the Hanoi Stock Exchange. Also in late September 2016, HOSE approved the registration for listing of shares of SHA of Son Ha Saigon Joint Stock Company. Currently, SHA has 18 million shares on HNX with a transaction price of 9,000 vnd per share.

Similarly, in early October 2016, HOSE approved the first listing of 2 shares which were transferred from HNX, including SCR of Saigon Thuong Tin Real Estate Joint Stock Company (Sacomreal) and AAA of Xanh An Phat Plastic and Environment Joint Stock Company (An Phat Plastic). Sacomreal has chartered capital of more than 2,170 billion vnd, equivalent to more than 217 million shares. Also, An Phat Plastic now has a chartered capital of 520 billion vnd. Accordingly, November 17, 2016 will be the last transaction day of AAA on the Hanoi Stock Exchange (HNX) and then, this stock will be transferred to the HCM City Stock Exchange (HOSE). Similarly, November 18, 2016 will be the first transaction day of SCR on HOSE with the reference price of 9,140 vnd per share, not changing much with the transaction price on HNX.

In addition, many businesses are planning to move their shares from HNX to HSX such as VICEM Materials Transport Cement Joint Stock Company (code VTV), Tien Bo Group (code TTB), PVI Joint Stock Company (code PVI), and Investment and Development of Vietnamese Enterprises Corporation (code FID), which will delist their FID shares on HNX to move to HOSE in 2017.

Business efficiency

Regarding the phenomenon of shares "moving" in recent years, Mr. Huynh Anh Tuan, the Director General of SJC Securities Company said that, to be listed on HOSE, companies must meet higher conditions. Along with that, HOSE also has higher standards of corporate governance and publicity of information. Therefore, when enterprises are listed on HOSE, it will help them to be more appreciated and provide them opportunities to mobilize capital better.

In fact, in recent times, there have been many companies raising capital very quickly after they move their share from HNX to HOSE. However, Mr. Tuan noted that if the capital increased too quickly, it would cause some risks. Specifically, when the charter capital increases but EPS (earnings per share) does not increase proportionally, businesses will face a dilution effect. In fact, after the issuance of additional shares to raise capital, enterprises need a certain amount of time to mobilize capital effectively. During the transition period, the financial indicators such as ROA (return on assets) and ROE (return on equity) will reduce. Meanwhile, investors can understand that the amount of capital which was raised from the issuance of shares is used ineffectively. In particular, if enterprises have trouble, the risks would be enormous.

In addition, most companies which move their shares to HOSE target to be listed on the ETF Fund to attract foreign investors. Because in fact, foreign investors still pay more attention to companies listed on HOSE. Earlier, at the Annual Meeting of Shareholders of SCR 2016, the SCR Board said that HOSE would help the liquidity of shares be more effective. Currently, according to the book value of the company, the stock price of this company is more than 14,000 vnd per share. This means that the current market price (more than 9,000 VND per share) does not reflect the real value of SCR. The SCR Board expected that the transition to HOSE would help all shareholders to carry out transaction of SCR at a better level.

Vietnam's stock exchanges to merge Vietnam is planning to merge the Hanoi Stock Exchange and HCM City Stock Exchange into the Vietnam ...

In this regard, Mr. Huynh Anh Tuan also said that not all shares listed on HOSE would be appreciated. Because there are many stocks on HOSE with the transaction price lower than the book value, especially many stocks with only 2000-3000 vnd but no one wants to buy. This means that if the business activities of enterprises are ineffective, the transfer of shares to other stock exchange markets is meaningless. Therefore, Mr. Tuan stated that business efficiency and transparency were always the most important keys to attract investors sustainably and effectively.