VIETNAM, February 26 – A trader observes market movements on his computer. — Photo VNA/VNS
HÀ NỘI — Despite an active stock market, a number of share auctions have still failed, some have even been canceled due to a lack of participating investors.
Lê Ngọc Nam, head of analysis and investment advice at Tân Việt Securities JSC (TVSI), said that corporate stock auctions depend on the volume of supply, prices and the attractiveness of these companies.
The problem here is that some companies set high expectations leading to high reserve prices, as in the case of LienVietPostBank (LPB) auction.
The Hà Nội Stock Exchange (HNX) said that when the auction expired, with seller Việt Nam Post Corporation (VNPost), only seven local retail investors signed up to buy 800 shares, far fewer than the total of nearly 122.2 million shares offered by VNPost.
In fact, the reserve price, at VNĐ28,930 per share (US$1.27 per share), was much higher than the corresponding price on the stock market. During the investor registration and deposit payment period, which lasted from January 25 to February 16, the LPB share price only traded between 23,000 and 25,000 VNĐ per share.
The market price of LPB closed yesterday at 23,050 VNĐ per share. As a result, the reserve price for the auction of VNPost’s LPB shares was 25.5% higher than the trading price.
Shares of LPB fluctuated sharply in the middle of last year after the announcement of Nguyễn Đức Thuỵ, who joined the board of LienVietPostBank and later became its vice president, signing up to buy more shares.
Previously, LPB shares went from less than 15,000 VNĐ per share in March 2021 to a high of 30,000 VNĐ in early June 2021. However, since June 7, 2021, LPB has been trading at a price below the reserve price offered by VNPost. .
Speaking on the matter, Phạm Văn Mạnh, a retail investor, said that the stock market is registering a huge volume of stocks, while the global markets are quite nervous at the moment due to a series of events, such as the tension between Russia and Ukraine. , and possible rate hikes by the US Federal Reserve.
Therefore, if the auction organizations offer high reserve prices which are even higher than the corresponding price in the market, it is clear that investors just have to adopt the wait and buy method. which will be much more profitable, added Mạnh.
In addition, it takes months for the shares purchased at the auction to be transferred to the buyer’s account.
Although the market trend is not very positive, high asking prices are making auctions less attractive for investors, with some auctions even cancelled.
Recently, the Ho Chí Minh Stock Exchange (HoSE) said that only four local investors registered to buy shares, with a volume of 50,000 units, at an auction of Binh Duong Trade And Development JSC.
The auction failed because the order volume was only 50,000 units, or 0.14% of the bid volume. The average bid price was equal to the reserve price of 27,900 VNĐ per share.
Earlier, the company announced to offer 35 million shares to the public with a reserve price of 27,900 VNĐ per share. The auction took place at 9 a.m. on February 22. After HoSE released the announcement on February 16, TDC’s share price fell from 26,000 VNĐ per share to 24,400 VNĐ.
TDC shares closed yesterday at 24,100 VNĐ, almost 15.8% below the reserve price.
The Bourse du Sud has also just announced the cancellation of the auction of shares in Châu Đức Construction et Urbanisme, proposed by the State Investment Company (SCIC), for lack of registered investors.
Another key reason leading to auction failure is that investors are not interested in stocks that have failed to meet their ownership ratio request, said Nguyễn Duy Định, senior client service specialist of MB Securities Company. (MBS). In fact, many investors want to buy more to hold a majority stake.
On the other hand, there are still auctions that attract investor interest, with companies selling all the shares offered for sale.
For example, HNX has just announced the results of the Picomat Plastic stock auction held on February 22. Picomat offered 2.7 million shares at auction, or 15.52% of the total outstanding shares.
The offer price is equal to the nominal value of 10,000 VNĐ per share. The auction brought together up to 120 investors, including one institutional investor. The total number of registered shares was nearly 3.1 million. The offer price ranges from 10,000 VNĐ to 20,000 VNĐ per share.
As a result, up to 115 retail investors won the auction. The total value of the shares sold was 29.4 billion VNĐ, equivalent to the average bid price of 10,934 VNĐ per share. —VNS
