Investments in penny shares (shares of small sised companies) or blue chips are always attractive as for new stock investors. During recent sessions, the share codes with the price of below 25,000 dong per share recorded a fairly high trading volume, On September 15, at HCM City Stock Exchange (STC), about 467,610 VID coded shares of Vien Dong Paper Joint Stock Co were changed hands at 13,300 dong each, 388,540 MPC shares of Minh Phu Seafood JSC were around at 16,500 dong each. In addition, on the same day, VIPCO had a trade of 887,640 shares at 18,300 dong each, Vitaco Petroleum Transportation JSC witnessed 944,400 VTO coded shares changing hands with the price of 18,800 dong per share.
On the northern bourse (HASTC), the penny shares with high trade included VNC of Vinacontrol, TBC of Thac Ba Hydropower JSC, TLC of Thang Long Telecom JSC and TXM of Cement Plaster JSC.
Liem-an investor chose penny shares-said that there are more opportunities to see an easy increase in prices of these shares once the stock market rallies. For instance, if buying a share at 20,000 dong, the investor can receive a dividend of 20% on par value or 2,000 dong per share rather than the spending of 100,000 dong on a share with a dividend of 40% (4,000 dong per share). But, another investor at BVSC’s trading floor protested that such a comparison is very limping because the scope, brand value and transparency of blue chips were confirmed already.
Talking with Thanh Nien, Huynh Anh Tuan, general director of SJC Securities Co said, investors should be very cautious as analysing operation result of enterprises for securities investment decision. They [investors] should predict the worst scenario for enterprises that can be affected by macro-economic factors. Investment risk will be at higher risk if only basing on initial investment capital amount.
Right after blue chips saw a sharp rise in prices, investors’ capital flow has switched to penny shares. Thus, when the VN Index rallied to the 550-point threshold, prices of almost shares surged strongly even some jumped 100%. According to Huynh Anh Tuan, pricing increase opportunity as for penny shares will not remain high. The most importance is Q3 business results of enterprises as a basic for investors to select shares.
MA Dinh The Hien, a stock specialist gave his point of view that penny shares listed on the STC all are the medium sised businesses with a good safety level. So the investment in these shares with low market prices is regarded as a suitable plan for high profitability. As the macro-economy grows strongly, these businesses will have more opportunities to hike capital than larger sised ones.
Specialists analysed, prices of penny shares could surge by 50-100% by the end of 2009 along with the economic rally and an expected reduction in inflation. The profitability is more attractive than sending money at banks. Meanwhile, blue chips are hard to see any rise in prices in that period.
Regarding HASTC listed penny shares, investment risks will be at lower because the scope of these firms is smaller.
Investors should draw up over one-year investment plans to gain earnings by next year end by selecting good shares that have price to book (P/B) ratio of lower 1.8 times (as for STC listed shares) and 1.5 times (as for HASTC listed shares), P/E ratio of less than 12 times, and revenue growth of 10%.