11:41 | 26/11/2015 Finance - Banking
(VEN) - The Hanoi Stock Exchange (HNX) organized 70 share auctions in the first 10 months of this year, a rise of 40 percent compared with 2014, through which 262 million shares worth over VND4.4 trillion were sold, providing a return of VND1.5 trillion.
Checking IPO results on HNX
In October, seven share auctions took place on the HNX, including four initial public offerings (IPOs), and three share auctions where the state pested from enterprises. Over 30 million shares were offered, while investors bid for 52.9 million shares, 76.1 percent more than the offered volume; and 21.5 million shares with total value of over VND311.5 billion were sold, providing a return of VND75.3 billion compared with the face value of the shares.
Five out of seven auctions in October were complete sell-outs. The IPO of nearly five million shares of the National Hospital of Transport attracted great attention of investors because this was the first public hospital to be reorganized to operate according to market mechanisms. Investors ordered 11.7 million shares of the hospital, 2.4 times more than those available. Shares were bought for VND23,597 per share, more than double the face value of VND10,000 per share.
In the first 10 months of this year, 70 share auctions took place on the HNX, including 51 IPOs and 19 auctions related to state pestments, with 49 share auctions and 33 IPOs selling-out, attracting the participation of many large investors, notable change compared to recent years, where mostly small-scale investors participated in share auctions on the HNX.
The HNX leadership attributed these results to decisive government policies to resolve difficulties facing the equitization of state-owned enterprises (SOEs). Governmental Resolution 15/NQ-CP dated March 6, 2014 proposes measures to accelerate the equitization of SOEs and the withdrawal of state capital from SOEs. Under this resolution, SOE leaders will have to take the responsibility in cases where equitization and state pestment fail to meet their schedule; and ministers, the heads of ministerial level agencies, and chairpersons of centrally governed provinces and cities will have to take responsibility for any delays in the implementation of equitization plans.
To accelerate the equitization of SOEs, the government has allowed the sale of state stakes at prices below the face value of their shares or below the value given in SOEs’ accounting records after deducting provisions for the loss of financial investments. SOEs are also allowed to sell stakes invested in public companies that suffer losses. Equitized SOEs must complete their registration procedures within 90 days to carry out transactions on the UPCoM market. In case where they are eligible, equitized SOEs must complete the procedures to list their shares on stock exchanges within a time limit of one year.
Nine companies have registered to auction their shares on the HNX this November through eight IPOs and one auction of state capital.