Sought after scrip named
Source: 26-JUL-2008 Intellasia | VnExpress
Jul 26, 2008 - 7:00:00 AM On the stock market, blue chip shares are usually hard to pick up and often lead to surges in the market, and such shares are hot items sought after by punters looking for a quick profit.

In Ho Chi Minh Stock Exchange (STC), the most famous blue chips include BMC and LBM, earlier SGH, TCT, TAC and HAX while those of HaSTC are added with S91, S99, SDA, PAN and TLT.

As the stock market took off, the above share codes saw a sharp increase in prices. Particularly, between last September and October, the price of S91 grew by 3.5 times, PAN up over three times, TLT surging five times, TCT soaring 5 times, BMC up 4 times in the May-June period of 2007 and later doubling in September.

In the recent recovery of VN Index, these share codes also led the market in terms of growth of 60-70% while VN Index only surged 30% and HaSTC Index was up 36% only.

These shares are of small capitalisation companies with good business results and rapid growth so they will become rare commodities if there is a buying order of several tens of thousand of shares.

At the time when the shareholders' meeting 2006 resolution was passed in April 2007, BMC of Binh Dinh Minerals JSC only had a chartered capital of 13 billion dong equalling to 1.3 million shares. Just when deciding to triple the capital to 40 billion dong, the company also had only four million shares, less than the average trade of SSI in some sessions. Of which, the state held 51% and a considerable volume belonged to big shareholders and strategic shareholders. So a real BMC share supply to the market was much less than four million shares.

At HaSTC, S91 of Song Da 9.01 Joint Stock Co (under Song Da 9) had the chartered capital of about 15 billion dong, of which the holding of the state and members of director board accounted for 55.5%. Relatives of Song Da 9 such as S96 and S99 also owned a fairly low capital of 25 billion and 29.7 billion dong. Especially, these members of Song Da 9 Co often posted good performance and high EPS.

By the end of 2007, total profit of BMC grew by 120% against 2005 while its EPS reached 10,000 dong, marking a very high level as compared with over 8,300 dong of SSI (up 21% yoy), 5,800 dong of REE, or more than 3,900 dong of STB.

Notably, HaSTC listed SCJ share code of Xai Son Cement Joint Stock Co with the chartered capital of 26 billion dong reported gaining eight billion dong profit in the second quarter of 2008. The profit is estimated at 19 billion dong during the first six months.

Surprising information also is significant for the rapid growth of rare share prices. An investor revealed, one-month right after Viet-Italy Steel JSC announced to mobilise capital to build a steel billet producing factory last year, the price of VIS coded share increased three times. The announcement on new titanium ore mining also helped BMC share price go up in the correction period of the stock market in 2007.

In 2006, EPS of S91 was about 3,200 dong that added 300 dong to 3,500 dong by the last end of the year. In the first quarter of this year, S91 earned a net revenue of over 16 billion dong, meaning that the company's after-tax profit on each share was 1,000 dong. However, in the period of between last September and October when the HaSTC Index grew by 50%, S91 share price jumped from 27,000 dong up to 96,000 dong each, marking a recorded growth of over 250% surprisingly. In recent time, the share price rose by another 72%. One specialist assed, as for the share codes with not-much impressive business results but very rapid increase in prices, we cannot use ordinary analysis to explain these sudden changes. He gave point of view that perhaps, there were insider (in-home) transactions for small shares.

For example, with the chartered capital of 15 billion dong, the S91 share volume being drifted in the market was about 700,000 units because the parent company Song Da 9 holds up to 55%. When S91 price stood at 27,000 dong per share, the highest trade of the share code was valued at only 6-10 billion dong. The trading volume of S91 was too small against the figure of REE and SSI at that time. But an investor who only spent 10 billion dong on S91 coded shares through his different accounts also could easily pushed the share price and sell S91 for a quick profit. When S91 price climbed to an expectation level, that investor would suddenly offload S91 coded shares.

A stock specialist said, recently, the number of rare shares has declined due to the downward trend of the stock market. Many share codes that previously were so called rare shares such as VIS, TAC and SGH seemed to be weak in the recovery period of market, which was opposite to the market movement in 2007.