Nearly two million shares of the Taiwan’s Full Power Electro-mechanics Construction and Installation Joint Stock Company coded FPC will be listed on the local bourse this week.
This will be the third foreign invested firm listed on the Ho Chi Minh City Securities Trading Centre, after Taya at the Ho Chi Minh City Securities Trading Centre (HSTC) and Tung Kuang at the Hanoi Securities Trading Centre.
The company is based in the Song Than 2 Industrial Zone, in Di An District, Binh Duong Province, with a total capital of VND100 billion ($6.25 million). It operates in the field of design and construction for civil and industrial works.
A company spokesman said that the bourse listing will help improve its trademark and allow the company to grasp listing opportunities to mobilise capital for its business development projects.
Liu Cheng Min, chairman of the Tung Kuang Industrial Co. shared the same views. He said that the target of growth on Tung Kuang’s business and production activities will be between 10 and 15 per cent per annum and the transparency on corporate information required by rules of the State Securities Commission (SSC) was very important.
Tung Kuang, one of the first six foreign invested firms to be permitted to transfer into holding companies on a trial basis to list on bourse has had an investment capital of $31m and legal capital of $11.2m.
So far, foreign stakeholders have grabbed 79.98 per cent of its chartered capital, whilst its employees hold 1.1 per cent and the remainders of chartered capital are held by outside shareholders.

Time to scale up
Tran Dac Sinh, director of the HSTC, said that more enterprises are choosing to list on the bourse as their strategic way to increase competitiveness.
He said that under the context of Vietnam’s integration into the world economy, listing on bourse will be a shortcut to help local and foreign investors make a partnership with companies.
According to the State Securities Commission (SSC), in July, the number of shares and bonds expected to list on the bourse would reach nearly VND4 trillion ($250m), equivalent to the total results of the last six years since the bourse started.
By the end of this month, there will be 43 securities codes listed on the bourse totalling around VND8trn ($500m), however, their market capitalisation could reach approximately VND50trn ($3.1bn).
SSC’s officials said that larger enterprises listed on the bourse in recent times will create momentum for a series of other enterprises to follow.
Vinamilk, Sacombank and Vinh Son-Song Hinh power company have listed on the bourse and Vietcombank, Asia Commercial Bank, Mobiphone, Vinaphone, and Bao Viet Insurance and Financial Corporation are expected to soon follow.
More than 74,000 shares of the Vinh Son Song Hinh Hydropower Joint Stock Company were traded last week at the Ho Chi Minh City Securities Trading Centre. Share price was VND35,500 ($2.20) for the joint-stock company, which has become the second power company on bourse.
The formerly state-owned company operates two plants that have a combined capacity of 134MW and has equity capital of 1.25trn ($78m), with the State holding a 60 per cent share.
Its chairman Nguyen Duc Doi said the company “has plans to build seven investment projects in the hydropower sector until 2012 with a total required capital of VND10trn ($640m) and the listing on bourse will be a good strategy for the company to reach is targets”.
Two weeks ago, the bourse was also bustling with the trading of two giants’ stocks, shares of Sacombank and bonds of the Bank for Investment and Development with the respective value of VND1.9trn ($120m) and VND2.2trn ($137m).
The SSC said that the local bourse is set for a supply boom with a series of initial public offerings (IPOs) set to be launched over the next few weeks.
Binh Minh Plastic Co will launch its IPO of 11 million shares. The SSC has also endorsed the listing of Interfood capitalised at VND206.33bn.
The four other IPOs that are expected include Vinafco, ImexPharm, Comeco and Chang Yih, with total share offers reaching VND153bn in face value.
Some previously listed firms have chosen July, the first month of the third quarter, to issue additional shares. Refrigeration company REE will issue 10 million new shares, while Savimex and Agifish are planning to issue two million and 3.5 million new shares, respectively.

Deepening involvement of foreign investors
More and more foreign investors have paid special attention to the local bourse and considered investing in shares of both listed and preparing-to-list firms as one of the most effective investment tools.
Nels Friets, managing director and head of equities for Citigroup in ASEAN, said Vietnam was a young market offering plenty of opportunities and, therefore, was attractive to foreign investors. It was still small but with more companies expected to list, a broader range of choices would emerge.
At the auction of Ba Ria-Vung Tau Tourism Company’s shares at the Hanoi Securities Trading Company, one foreign institution bought more than five million out of the offered 5.75m shares (87 per cent).
Another foreign institution bought 1.4 million of the 3.4 million shares (equivalent to 41 per cent) auctioned in the General Import-Export Company (Generalexim 1).
Five institutions and five individual investors purchased 1.7 million shares out of the 4.49 million shares (37.86 per cent) available at the Gemardept’s shares auction. Foreign investors also purchased the majority of shares at many other auctions.

Looking to the horizon
The HSTC will be transformed into a stock exchange this year as part of its five-year market development plan to 2010, according to an official from the SSC.
HSTC director Tran Dac Sinh said it was critical for Vietnam to have a stock exchange when the country accedes to the World Trade Organization (WTO).
“The exchange will overcome the shortcomings of existing securities trading centres and aid the country in the economic integration process,” said Sinh.
The SSC proposed that during the 2007-2010 period, the exchange will probably be operated as a one-member limited liability company under the Ministry of Finance, with securities companies registered as trading members.
A modern trading floor will be installed in 2008, and the exchange will be equitised and operated as a joint stock company with the state holding a minimum 75 per cent stake during the 2010- 2015 period.
The state’s holding would be reduced to 51 per cent after 2015, an SSC’s official said.
“It will also provide investors a better range of investment instruments as the nation integrates into regional and global financial markets,” he said, adding the transitional phase from a state agency to a limited liability company should be completed by the end of the 2008 fiscal year.
The exact role of the Hanoi Securities Trading Centre (Hanoi STC) must also be defined more clearly, he said, suggesting the centre specialise in trading shares issued by smaller companies not meeting the listing requirements of the HSTC.
Nguyen Thi Lien Hoa, head of the SSC’s Market Development Department, said the Hanoi STC will also launch a distance transactions project, which will remove representative agencies operating on the stock market floor and allow computers to take in transaction orders from securities companies.
HSTC will soon turn from a state-run profit-making administrative agency into a limited liability company, and finally into a joint-stock company under SSC management.
Under the centre’s stock market development plan, the country would take steps to increase the volume of business investment capital mobilised to a level equivalent to 10-15 per cent of the country’s gross domestic product (GDP) by 2010.

Source: Vietnam Investment Review