Expensive scrip such as Hoa Binh Rubber Co or Horuco has recently been auctioned with a very high premium. The price of Binh Minh Plastic Co share is expected to also be high at the auction on October 21. Last week, trading on the informal market was quiet due to the low supply and the rapid increase of formally traded shares.
Share buyers did not seem interested in buying and sellers were thin, as they were not in need of cash for other deals, said Quoc Tuan a freelance broker in HCM City. Paper sold by this broker for the past two weeks were mainly from customers who needed to cash up to join upcoming share auctions or to buy low priced property. The lack of supply of scrip has turned many investors into long-term investors.
Even bank share trades were thin on the ground. Buyers seeking Eximbank and Sacombank shares strongly decreased leaving an almost unchanged share price for the week. So, if shareholders want to sell, buyers are few so prices offered are low.
The board of Eastern Asia Bank (EAB) said few shareholders have wanted to sell shares over the past two months as the bank plans to issue additional shares to existing shareholders.
Some investors in Hanoi and HCM City are considering shares of Tuong An Edible Oil Co after hearing news that the company and the brokerage arm of Bank for Investment and Development of Vietnam (Bidv) is finalising listing procedures. Late last week, Tuong An shares were offered at around 200,000 dong [for the 100,000 dong par shares] but takers were few.
According to Bao Viet Securities Trading Co (BVSC), Taiwan-owned Taya Co, which recently became the first foreign firm to become shareholding company, announced it would receive a listing license before November 15. However, investors in HCM City were unimpressed as there are reports that key staff and management are slipping away from Taya to work elsewhere.
Shares of Electric and Electronic Co (TIE) nearly disappear in the market. TIE is facing many difficulties in the development of high-speed internet service in the joint venture with Hanoi Broadcasting and Transmission Station (BTS).
Many investors in the informal market have indicated they want to switch to the formal market but they regret they too so long as the VN Index has now reached a three-year high. Therefore, the informal stock market is likely to face radical swings in the near future depending on supply and demand since the government has increased the ceiling of foreign holdings from 30% to 49%.