Internal shareholders rush to buy stock

SGI 27/03/2020 06:00 Theo dõi Đầu Tư Tài Chính trên

With the stock market in decline, and stock prices in free fall, many internal shareholders holding key positions in business companies are rushing to buy up stock in various companies.

HPG is the enterprise with internal shareholders registering to buy the largest number of shares.

Other than trying to salvage for future financial investment, this move confirms the potential growth of businesses in the future, even though currently the difficulties are more palpable and unpredictable.

Stocks at bottom

The stock market is experiencing the sharpest decline week in twelve years since the global recession of 2008, with investor sentiment severely affected after many infected cases of Covid-19 were detected in the country, added by the US stock market dropping to a record low after world oil price plummeted. As of 16 March, the VN Index dropped by nearly 205 points, about 21.2%, compared to the beginning of the year, and market capitalization dropped by VND 1,600,000 bn or USD 68 bn. Foreign investors were also quite pessimistic, with total net selling value by foreign investors from the beginning of the year touching VND 4,200 bn.

Unusual movements in the stock market have caused shares of listed companies to be strongly affected. Many stocks assessed at having good fundamentals in recent years have dropped to bottom. Some cases in point are, Saigon Beer Alcohol Beverage Corporation-Sabeco (SAB); Vietnam Dairy Products Joint Stock Company-Vinamilk (VNM); PetroVietnam Drilling and Well Services Corporation-PVDrilling (PVD); Quang Ngai Sugar Joint Stock Company (QNS); Binh Son Refining and Petrochemical Joint Stock Company (BSR); Hoa Phat Group JSC (HPG); Saigon Thuong Tin Real Estate JSC-TTC Land (SCR); NoVa Land Investment Group Corporation-Novaland (NVL); Thanh Thanh Cong JSC-Bien Hoa (SBT); Tien Phong Plastic JSC (NTP); Mobile World JSC (MWG); An Phat Xanh Plastic Joint Stock Company (AAA); Gemadept JSC (GMD); Refrigeration Electrical Engineering JSC (REE); and Dat Xanh Group JSC (DXG).

Shareholders rush to buy

Up to now, internal shareholders of dozens of enterprises have registered to buy 60 million shares, equivalent to VND 1,400 bn. In particular, HPG internal shareholders have registered to buy the largest number of shares. According to an announcement, Mr. Tran Vu Minh, son of Mr. Tran Dinh Long, Chairman of HPG Board of Directors, registered to buy 20 million HPG shares worth VND 394 bn. However, the enterprise with the largest registered share value is REE and Ms. Nguyen Thi Mai Thanh, Chairwoman cum General Director, has registered to buy 15 million shares worth VND 454.5 bn.

Among the list of internal shareholders registering to buy shares in large quantities include Ms. Tran Thi Thoan, Standing Deputy General Director of AAA, who registered to buy 5 million shares worth VND 55 bn; Mr. Bui Thanh Nhon, Chairman of NVL Board of Directors, registered to buy 5 million of NVL shares valued at VND 255 bn; and Mr. Dang Quoc Minh, Chairman of Board of Directors of NTP, has registered to buy 1 million shares of NTP.

Recently, several SBT board members have registered to buy a large amount of stock. Specifically, Mr. Pham Hong Duong, the Standing Vice Chairman of the Board of Directors, registered to buy 1 million shares, raising the ownership rate to 0.61% of charter capital; Mr. Nguyen Thanh Ngu, General Director, registered to buy 1 million shares, in order to increase the ownership to 0.71%. In addition to these two senior leaders, several SBT Board members also registered to buy about 2.5 million shares. Thus, the total number of shares bought by SBT management board was 4.5 million valued at VND 68 bn. Similarly, many SCR board members registered to buy 5 million SCR shares worth VND 22 bn.

Rare opportunity

Explaining the acquisition of internal shares to increase the ownership rate, an SBT leader said that this is a good time for long-term investment. According to him, in addition to the positive prospects of the industry as world experts have analyzed, SBT also has the advantage of being a pioneer in attracting foreign strategic investors. In addition, SBT currently dominates the domestic market share, expanding into the export markets and diversifying in products such as sugar, and cooperating with big names in Europe and Asia to develop an agricultural product chain.

Leaders of many listed companies have bought shares, showing their determination for a long-term commitment as well as contributing to the strategies set forth and other corporate governance activities in the future.

Ms. Tran Thi Thoan is of a similar opinion that the purpose of registering to buy 5 million AAA shares is for long-term financial investment. This is really a very wise investment, because AAA is trading at an extremely attractive price, especially as businesses have now many opportunities to increase exports to the European market. According to investors, the Vietnam-EU Free Trade Agreement (EVFTA) will reduce the tax on AAA goods exported to the European market from 3% to 0% in the first year. Currently, the European market accounts for 50% of AAA export revenue.

This tax reduction will be very meaningful for businesses, when the net profit margin of AAA thin film packaging will be 6%. In addition, AAA will benefit slightly more compared to its Chinese rival due to the Covid-19 pandemic which has plagued the industrial production in China, while AAA mostly uses raw materials imported from Middle Eastern countries.

Before registering to buy 5 million NVL shares, Mr. Bui Thanh Nhon bought more than 9.3 million NVL shares already. If the transaction is successful, Mr. Nhon will hold 206 million NVL shares worth 21.25% of the charter capital. Mr. Nhon's continuous accumulation of stock, besides for purpose of financial investment, will also place him strongly as a major shareholder and investor in the business.

Translated by Khoa Anh

Hai Ho