“Pouring” Goods on Stock Exchange

Some of the elite Vietnamese companies have already been granted a listing license, such as ACB, Itaco, and Ralaco. While many others such as Saigonbank, Bao Minh, Tuong An, FPT, Mai Linh, Domesco, Tapack are queuing up for their own listing license.

The Viet Nam stock exchange will boom in capital wilh more strong companies being listed in late year. (Photo: T.C)

With the investment of such strong companies being listed, a total estimated scale of over VND9 trillion (US$562 million), the Viet Nam stock market contains a latent undercurrent of the economic future of Viet Nam after its anticipated entrance into the WTO.

With the fiscal year 2006 coming to a close, listing on the Viet Nam stock exchange is becoming a phenomenon that is attracting a number of competing enterprises.

The entrepreneurial impetus behind such corporate eagerness came about in the beginning of the second fiscal quarter of 2006 when the Securities Law was promulgated.

The Securities Law sets out more succinct guidelines for standards of disclosure and governance of all companies, whether traded over-the-counter (OTC) or on the exchange, generating greater investment confidence.

However, the fervor began to peak in October as the result of two occurrences in the economic stratosphere.

The first reason is due to a 50% business income tax reduction incentive, which is set to expire by the end of this quarter.

The other reason is the result of Viet Nam’s expected entrance into the WTO, which appears to be drawing near.

According to the State Securities Commission, there is an average of two enterprises submitting for listing daily.

They are all jockeying for a particular advantage upon the expectation of an influx of foreign investment brought on by Viet Nam’s admission into the WTO.

Itaco has the imposing roadshow for its share and becomes the first industrial park listed to stock exchange. (Photo: T.C)

The Viet Nam stock market has been recognized as one that is currently among the most rapidly developing stock markets in the world.

Some international press agencies such as CNN and Business Week have ranked the VN-Index in the top three of the world’s fastest increasing indexes this year.

On November 13, the VN Index was up 75% to 537.28 points from 305.28 in the first fiscal quarter.

An illustration of theses increases can be seen in the listing volume.

The Ho Chi Minh City Securities Trading Center has seen market capital rise to over VND8.35 trillion (US$522 million) from VND2 trillion (US$125 million) earlier in the year.

By the end of the fiscal year the capital is expected to reach a rate of more than VND12 trillion (US$750 million), an increase of over 600%. This increase is the largest of any Asian market, and a rate that other markets simply cannot keep up with.

The scale of market listings in both Ho Chi Minh and Ha Noi are certain to strengthen continuously as both national and international companies receive the approval of their listing license.

Such companies as Asia Commercial Joint-Stock Bank (ACB), Bim Son Cement Joint-Stock Co. (BCC), Tien Phong Plastic Joint-Stock Co. (Tifoplast), Prudential Balanced Fund (PRUBF1), Tan Tao Industrial Park Joint-Stock Co. (Itaco), Petrolimex Gas Joint-Stock Co. (PGC), Rang Dong Light Source And Vacuum Flask Joint-Stock Co. (Ralaco), and more are currently in line for their official listing date on the exchange.

These companies alone will contribute more than VND3.5 trillion (US$219 million) to the market scale.

More most brand names will go to public such as Bao Minh Insurance and Mai Linh taxi. (Photo: T.C)

If the approval of the more than 50 enterprises to recently submit an application for a listing license with the State Securities Commission is granted, investment in the Viet Nam stock exchange should reach a fever pitch.

The total listing scale of these 50-plus enterprises is estimated at around VND5.5 trillion.

There’re also some brand names that got impression from investors such as Saigon Bank for Industry and Trade (Saigonbank), Tuong An Vegetable Oil Joint-stock Co. (Taoil), Ho Chi Minh City Insurance Joint-stock Co. (BaoMinh), Dong Thap Medical Import Export Co. (Domesco), Oil and Gas Drilling and Service Co. (PVDrilling), Corporation for Financing and Promoting Technology (FPT), etc.

With so many investment possibilities on the horizon, the hope is that the companies listed on the Viet Nam stock exchange will provide a comprehensive entrepreneurial medium integrated for the purpose of accessing a wider range of opportunities than would have been possible for them individually.

There appears to be no better way in the current global economy for enterprises to ascertain such strategic investors and partners, while gaining the public trust, than the stock market.

This belief is being clearly demonstrated by the volume of growth and the number of companies applying for licensing.

However, the true litmus test will come when we see whether the forecasted investments and record profits do in fact follow this flurry of activity.

The VN-Index up to 75% higher than the same time in last year. (Designed by T.C)

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By Tuong Chau

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