The share price on the OTC market has recovered after a long period of falling down. Since banks, insurers and financiers announced high profit, their share prices have increased by 2-10% after a long period of falling down.
Many investors who realised that the prices of banks and insurers had dropped to the deepest possible lows decided to buy shares.
The fact that the State Bank of Vietnam allows foreign financial institutions to raise the foreign ownership ratio in local joint stock banks and the banks’ high profit both have helped the share prices bounce back, or prevented further decreases (HSBC and Techcombank have got the nod from the central bank to raise the former’s stake ratio in the latter to 15% from 10%, while the profit of EAB, Military Bank, PetroVietnam Insurance was higher than VND100bil for the first six months of the year).
Investors have found out that many OTC share items have financial indexes that are even better than the indexes of the share items on the official bourse and have been skyrocketing in price recently, including BMC, TCT, HAX, SGH and LBM.
Huy Nam, a securities expert, cited an example. PVI (PetroVietnam Insurance) is trading at VND75,000/share, just equal to ½ of the listing SGH (VND155,000/share on July 11). Meanwhile, the business result, profit and other indexes of PVI are all better than SGH.
A lot of other OTC share items are in the same situation as PVI. Experts said that the prices of these OTC items would regain their actual value once they were listed on the bourse.
The HCM City Securities Trading Centre has allowed the Tay Ninh Rubber Company and eight other companies to list at the centre. Meanwhile, the Hanoi Securities Trading Centre is going to welcome new members, including PVI, Vincom and Hoa Phat.
The news has made the OTC market more bustling in the last few days as investors have rushed to buy the share items which are going to list on the official bourse, including Tay Ninh Rubber, Thong Nhat Rubber, Thuan An Wooden Furniture, Ba Ria-Vung Tau Housing Development, and Hoa Phat Steel.
The low price proves to be the biggest advantage of these OTC shares. Tay Ninh Rubber’s shares, for example, are trading at below VND130,000/share, while Tay Ninh Rubber’s shares are considered better than Hoa Binh Rubber’s shares (HRC) on the official bourse: trading at VND180,000/share. Phu My Fertiliser, Bao Viet insurer and PVI all are selling at below VND80,000 and are believed will attract many investors.
The director of a Hanoi-based securities company said that it was the right time to buy bank shares on the OTC market as the prices are low enough for long-term investment.
Nguyen Ngoc Truong Chinh, Head of the OTC Share Brokerage Division under ACBS, said that many investors who once turned their backs on OTC shares were now paying attention to the OTC items of profitable enterprises.
A broker at Nguyen Cong Tru OTC securities market in district 1 in HCM City also said that he had bridged many successful transactions of EAB Bank, Hoa Phat and PVI – items that could not find customers one month ago.
However, only the shares of profitable and big companies have seen a price recovery, while the shares of many other items have not recovered yet; the prices of several have decreased by 30-50% over March.
Source: VNE
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