Share issuance value surges as businesses expand

By Dat Nguyen May 3, 2021 | 11:17 pm PT

An investor looks at stock prices on the screens at a brokerage in Ho Chi Minh City. Photo by VnExpress/Quynh Tran.

The share issuance value of listed companies as of mid-April this year was more than 1.6 times that of 2020 as businesses seek to expand operations.

As of April 13, 54 listed companies have announced plans to issue more shares this year to raise nearly VND44.7 trillion ($1.94 billion), according to financial data provider FiinGroup.

In the first quarter, 43 companies raised nearly VND19.8 trillion, accounting for nearly 70 percent of total amount raised last year.

With Vietnam being able to contain its Covid-19 outbreaks relatively efficiently, businesses are seeking to recover and expand production. Therefore, there is high demand for raising capital, a FiinGroup report says.

The biggest issues this year are set to be that of national flag carrier Vietnam Airlines and agriculture giant HAGL Agrico, together accounting for one-third of the projected total.

Vietnam Airlines is set to raise VND8 trillion through share issuance this year, seeking to reduce its debt-over-equity ratio from 6.2 to 5.2.

HAGL Agrico is set to raise VND 7.4 trillion.

Several brokerages are also planning to issue more shares amid rising demand for margin debt as new investors pour cash into the stock market.

VNDirect plans to raise VND2.2 trillion, while Ho Chi Minh City Securities wants to raise VND2.1 trillion.