PetroVietnam Power Corporation (PV Power) will debut on the HoSE on January 14 with more than 2.34 billion shares. (Photo: VNA) HCM City (VNS/VNA) -The Ho Chi Minh Stock Exchange (HoSE) has recently accepted or looks set toaccept the listing of three more large-cap companies, but questions remainfollowing a volatile year for the market.
The PetroVietnam PowerCorporation (PV Power) will debut on the HoSE on January 14, 2019 with morethan 2.34 billion shares. On December 28, 2018, the company cancelled thetrading of more than 467.8 million shares on the Unlisted Public Company Market(UPCoM).
On January 2, the southern marketregulator announced it had approved the listing of the country’s largestceramics and tile producers Viglacera with more than 448.3 million shares andan unknown debut date.
National flag carrier VietnamAirlines recently filed to list all of its 1.4 billion shares on the southernbourse. The company also plans to terminate its listing on the UPCoM in thenear future if the filing is approved.
If Vietnam Airlines’ listing isapproved, the southern market will receive three new large-cap companies andinvestors will have more industry-leading options.
Moving from the UPCoM and the HanoiStock Exchange (HNX) to the HoSE means the companies meet the standards of thesouthern bourse, which are stricter than the two other markets. That recognitionmay help boost the prices of the companies’ shares and lure more foreigncapital.
But questions remain about theHoSE listings. The firms that started trading on the HoSE in 2018 often sawshare prices jump strongly on the debut, but as post-debut performance dependson market conditions, they were often below expectations.
Large firms that debuted on theHoSE in 2018 included HDBank, Techcombank, Saigon Real Estate JSC, residentialdeveloper Vinhomes and Vincom Retail.
As of January 4, Saigon Real EstateJSC shares have lost 35.6 percent in value since their debut. HDBank shareshave shed a quarter of their value, and Techcombank shares have declined by 27 percent.Shares of the two subsidiaries of property developer Vingroup – Vinhomes andVincom Retail – have decreased by 16.3 percent and 17 percent, respectively.
The first three months of 2018were an ideal time for companies to start trading on the southern bourse as thebenchmark VN Index reached its record high of 1,204.33 points on April 9.
But the rest of the year waschallenging for listed companies as world markets were threatened by fears of aglobal economic slowdown amidst trade tensions between China and the US.International capital returned to developed markets from emerging ones to dealwith US lending rate increases.
The benchmark VN Index ended 2018at 892.54 points, down 9.31 percent from the end of last year and down 26 percentfrom its record high in April. Listed firms on the southern market have alsoseen their share prices decline since then.
Market volatility and thedowntrend of large-cap stocks led PV Power to delay its HoSE listing severaltimes as the firm feared listing shares in such an unstable context would notbe profitable for shareholders.
In 2019, the Vietnamese stockmarket is expected to encounter big challenges caused by global challenges thatdrag down investor confidence, including geo-political instability in Europeand the trade tension between China and the US, which seems unlikely to beresolved in the short term.-VNS/VNA
VNA
