Bosses try to ease investors’ jitters

The heads of four leading Vietnamese companies met with shareholders yesterday to allay fears amid tumbling share prices.

Investors fired more than 30 questions at bosses of the Refrigeration Electrical Engineering Corporation (REE), the Cables and Telecom Materials Company (SAM), the Gemadept Corporation (GMD) and the Kinh Do Corporation (KDC).

Top of investor concerns was falling prices - despite seemingly sound business performances and potential investment plans.

Sacom General Director Do Van Trac said three factors were chiefly to blame for declining stock values - the State’s macro-economic policies (such as the State Bank of Viet Nam’s decree 03), business results and investor confidence.

He said the most noticeable feature of the Vietnamese stock market was the imitative behaviour of investors.

"Vietnamese investors often follow each others’ decisions, which has a negative influence on share prices," said Trac.

"Investors cannot blame their losses on market factors, they must look to themselves. They should be patient and believe in their companies’ future, rather than just off-loading shares when they find prices go down, which makes the situation worse."

Trac added that he hoped the shareholder meeting would convince investors either to sell their shares or hold onto them.

GMD General Director Do Van Minh said prices had been inflated beyond their real value and that it was only normal to expect them to find their own level.

He said that GMD’s true share price lay between VND160,000 and VND180,000. Next year, if GMD profit’s grow by 30 per cent, as anticipated, investors could expect stock values to rise accordingly.

Investors also raised the issue of foreign ownership, which currently stands at 49 per cent of REE and GMD.

Investors asked if the companies intended to issue more shares to attract greater foreign investment to hike prices.

Minh said: "If the company issues more shares, we will try not to sell directly to foreign strategic shareholders in order to force them to buy on the stock exchange. This can make prices higher."

Trac said foreign investors now owned 40.3 per cent of SAM’s shares. He said if they wished to buy a larger stake in the company they would have to do it through the stock exchange. However, he doubted strategic shareholders would sell.

The chairwoman of REE Management Board, Nguyen Thi Mai Thanh, said her company would only issue more shares as part of its business plan.

On this issue investors expressed concerns about investment in real estate.

Thanh affirmed that REE’s main investments were in property and finance. She said profits from real estate investments this year would be VND100 billion (US$6.2 million), accounting for one-third of the company’s total targeted profit.

Source: VNS