SSC tells firms to be cautious in issuing new shares
13-OCT-2008 Intellasia | Dow Jones
Oct 13, 2008 - 7:03:00 AM
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Vietnam's State Securities Commission said Friday companies should be cautious in issuing new shares to avoid hurting stock prices.
As the financial and stock markets are facing troubles, "new issuance in this situation could have negative impact to the prices of the stocks," the SSC said in a statement.
"The SSC proposes that companies should be cautious in planning any issuance of new shares, or using proceeds from new issues," the statement said.
Companies should make public their business plans to inform shareholders in a timely way, it added.
Analysts praised the move, saying it was an important decision to support investor sentiment because it helps eliminate the concern of seeing new issues amid falling prices.
"The SSC's decision certainly gives market participants a great relief," said Nguyen Hac Hai, who is chief analyst of Rong Viet Securities in HCM City.
According to state media, about 40 companies have announced plans to issue new shares valued at 10 trillion dong (US$600 million) in the fourth quarter.
Vietnam's share index fell 4.7% to 379.06 Friday, losing 16.2% this week, and pushing it closer to its lowest level of the year at 366.02 on June 20.
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