More and more firms decide to delist shares
More and more firms decide to delist shares
Many companies have delayed their listing plans, and some listed firms were forced to leave the stock market, reflecting the lacklustre market that has lasted since the beginning of this year.
The HCM City Stock Exchange has just announced a voluntary delisting of Godaco Seafood Co (AGD).
The company's decision came as a surprise to many investors as AGD is still profitable, expecting to make VND70 billion (US$3.3 million) in the first nine months of this year. Its shares are also traded at a relatively high price of VND48,000 ($2.29) a share.
AGD decided to buy back shares from minor investors at a price of VND50,000 ($2.38) a share. The company's chairman Nguyen Van Dao gave no explanation about the company's decision.
Since the beginning of this year, seven companies were forced to delist their shares from the HCM City exchange because of three years of consecutive losses or violations of disclosure regulations.
These companies were seafood producer Basa (BAS), Cadovimex Seafood Import - Export and Processing (CAD), Sai Gon Cable (CSG), Cavico Vietnam Mining and Construction (MCV), Mekophar Chemical Pharmaceutical (MKP), Sai Gon Beverages (TRI) and Viky Plastic (VKP).
On the Ha Noi Stock Exchange, Viet Hai Shipping and Real Properties, An Giang Coffee (AGC), construction firm Vinaconex No 11 (V11) and Vung Tau Petrolium Trading and Service (VMG) were forced to leave the stock market due to consecutive losses. Habubank (HBB), construction Song Da No 64 (S64) and Song Da No 6.06 (SSS) also saw their shares removed from market listings because they merged into other companies.
By the end of this month, two other businesses, SME Securities Co (SME) and Song Da No 3 (SD3), will join the group of delisted firms because they committed serious violations of disclosure regulations.
According to Dinh The Hien, director of the Institute for Computer Science and Applied Economics, previously companies wanted to list shares to raise capital as well as boost their reputation, but many do not really have a development strategy or a way to transmit information transparently.
"Since it is difficult to mobilise capital from issuing shares at present, many companies are considering delisting their shares to avoid violating the information disclosure regulation," Hien was quoted as saying in the newspaperTien Phong.
Besides the compulsory delistings, Hien said many firms that had been making losses for a long time and now saw their shares having plunged to just a few hundred dong (less than US 5 cents) were thinking of leaving the market voluntarily.
"To make the market more transparent, individual investors should use their votes to remove businesses which do not comply with disclosure rules," Hien said.
Nguyen Son, head of the State Securities Commission's Market Development Department, said that the Government's Decree 58 stipulated that businesses must have the approval of at least 50 per cent of shareholders in order to remove their listings.
"This aims to protect small investors, avoiding a scenario where companies list shares to raise capital and then delete their listings," Son said
vietnamnews
