Local
cash-strapped property companies have strong expectations on new share issuance
as a way to mobilize capital from the improving stock market after the central
bank’s announcement to loosen realty loans recently.
Like other securities, prices of the real estate
stocks have constantly shrunk in line with dampened confidence among investors
over the past year, dragging down the market capitalization of many realty
enterprises.
Many realty firms have failed to lure funds from
issuing shares to investors due to the stagnant economy and unfavorable stock
market, with their stock prices falling below the face value in some cases.
Eximland was unable to become a listed entity as
scheduled given tough times last year. The developer asserted in this year’s
general shareholders’ meeting that it would continue considering an appropriate
time for listing its shares on the Hanoi Stock Exchange (HNX) within the year.
Similarly, Phat Dat Property Development Corporation
in 2011 considered issuing 18 million shares to strategic partners as the first
option or under the format of depository certificates in the another option. At
last, the business had no choice but to give up both plans because of the
gloomy stock market.
To replenish business capital, the company intends to
continue pursuing the fund mobilization bringing about an additional 180
billion dong if successful.
Also with the purpose to seek working capital for
business activities, Van Phat Hung JSC is outlining a 300-billion dong separate
convertible bond issuance scheme with terms of one to three years.
The current increase in property stock prices will
improve potential development of these entities, thus helping them entice
investors to buy newly-issued securities more easily, said chairman Tran Minh
Hoang of Vinaland.
A lot of developers are focusing on seeking capital
via bond and share issuance channels in an effort to remedy investment fund
shortages they are facing, Hong noted.
Saigon Times
Business & Investment Opportunities
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