SSC won't monitor additional share issuances by firms
04-OCT-2008 Intellasia | Dow Jones
Oct 4, 2008 - 7:00:00 AM
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The State Securities Commission won't monitor the additional issuance of new shares by shareholding companies in some cases, a senior SSC official said Friday.
"From October, the companies can issue bonus shares, share dividends or other private placements using their retained profits and the SSC won't intervene in their decisions," said Vu Van Quang, head of the SSC's administration in Hanoi.
The SSC will only intervene if companies violate the regulations, Quang noted.
Pham Duy Kien, chief analyst of Eurocapital Securities said the move was good because it allows companies to decide how much and when they can issue new shares.
"After eight-years of launching the stock market, companies and investors have matured, and they will know impact of their new issuance," Kien added.
But some Hanoi-based traders also said they worry that without effective monitoring, the market will be flooded with new shares.
Statistics released by the Ho Chi Minh Stock Exchange indicated that the total number of outstanding shares rose more than 2% each month since the beginning of the year, and by the end of September were up 28.5% from end-2007.
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