New share issuances on the cards amid favourable market

New share issuances on the cards amid favourable market

Vietnamese firms are planning to issue new shares amid a relatively auspicious stock market landscape.

Early this month, the board of directors at ICD Tan Cang-Long Binh JSC, which specialises in providing warehousing services, customs clearance services, and freight, finalised a list of shareholders eligible for bonus shares or the right to purchase new shares.

The real estate sector is expected to raise robust capital from the third quarter. Photo: baodautu.vn

ILB will issue 13.7 million shares, of which 12.35 million will be offered to existing shareholders at a price of VND20,000 ($0.8) apiece, with a subscription ratio of 50.4 per cent.

The raised amount is expected to surpass $9.8 billion, of which ILB will use $3.64 million to invest in a joint venture with Tan Cang Hoa Tieu Co., Ltd., while $6.24 million will be used to pay infrastructure costs to its parent company, Saigon Newport Corporation, which owns a 51 per cent stake in ILB.

Hanoi-based tech firm Elcom Technology Communications Corporation closed its shareholder list on February 24 for an offering of nearly 12.5 million shares at a ratio of 100:15, priced at $0.4 per share.

The total proceeds have been estimated at nearly $5 million, of which Elcom plans to use $3.28 million to repay principal and interest on several credit agreements and pay debts to suppliers.

The remaining $1.72 million will be injected into research for new technologies and products.

In addition, Elcom will issue approximately 4.2 million bonus shares to shareholders at a ratio of 100:5. After executing these two plans, Elcom's charter capital will increase from $33.3 million to $40 million.

For southern developer Nam Long Investment Corporation, the company has asked for shareholders' opinions on a plan to offer shares to existing shareholders during 2025.

The firm plans to issue beyond 100 million shares at a ratio of 100:26, with a price of $1 per share.

With about $100 million to be raised from the offering, Nam Long plans to use nearly $10.64 million to invest in two key subsidiaries: Nam Long Land and Nam Long Commercial Property. The funds will be disbursed in the last two quarters of this year.

In addition to offerings to existing shareholders, some businesses plan to conduct private placements for strategic shareholders.

For example, at the end of February, TDG Global Investment JSC announced a plan to issue nearly 6.5 million shares to four professional individual investors at a price of $0.4 per share.

The expected fund of nearly $2.6 million shall be for infrastructure construction for Bac Son 2 Industrial Cluster in the northern highland province of Lang Son in the first half of 2025.

On February 17, the State Securities Commission announced it had received an application for a share offering from Binh Duong Trading and Development JSC.

The company also plans to offer 35 million shares at a price not lower than $0.4 apiece, expecting to raise $14 million.

The entire sum will be used to repurchase part of the TDC.BOND.700.2020 bond batch ahead of schedule.

The bond batch, issued on November 9, 2020 with a total face value of $28 million, will mature on November 15 of this year.

The proceeds aim to pay dividends to the parent company, Becamex IDC Corporation, and to repay loans and bank interest.

Regarding stock market performance, Nguyen The Minh, head of analysis at Yuanta Securities Vietnam, said that the VN-Index surpassed the 1,300-point threshold mark in the final trading sessions of February.

In Minh’s words, since 2024, the VN-Index had reached the 1,300-point threshold seven times. The key difference in the seventh instance is that the leading stocks are no longer just mid- and small-cap stocks but include significant participation from large-cap stocks, particularly from the steel, securities, and some banking sectors.

This has helped the VN-Index maintain the 1,300-point level more solidly compared to the previous six times.

Liquidity is also an important factor. In the past, when the VN-Index hit 1,300 points, liquidity would spike briefly at the threshold and then quickly decline.

Currently, liquidity has been maintained after the index surpassed the resistance level, indicating funds are not exiting but primarily circulating between different stock groups.

As a result, Minh believes that the current period is relatively favourable for businesses to realise capital through the issuance of shares and bonds.

Regarding investors, the Yuanta Securities expert recommended that before participating in additional share issuance offerings, investors should assess the company’s internal strengths, future growth potential, and share price.

“Investors need to compare the offering price with the trading price on the stock exchange to determine the reasonable price difference. Companies might push stock prices up before the offering to ensure its success, but afterward, prices may sharply decrease. The key is that the price after adjustment must still be higher than the purchase price, otherwise investors will face the risk of losses,” Minh said.

VIR