Analysts believe that if businesses really need to issue shares to increase capital at this ‘sensitive’ moment,’ they should seek new investors rather than rely on existing shareholders.


In 2009, the plan to increase capital through the stock market will be carried out carefully by enterprises, because investors are indifferent to the share issuance, and because enterprises find it difficult to build up business plans that are convincing to shareholders at this moment.


The Chairman of a big-listed company said that asking shareholders to purchase more shares at this moment should be carried out only when businesses have no other choice.


Chairman of Kinh Bac Urban Development Joint Stock Company (KBC), Dang Thanh Tam also said that KBC does not want, and will not build up the plans of asking existing shareholders to purchase more stakes. He said that the company will try to seek capital by issuing shares to new investors.


In 2008, Kinh Bac was not successful in the attempt to raise the chartered capital to VND 2 trillion.


Vinare, the Vietnam Reinsurance Corporation, now has VND 600 billion in chartered capital and plans to increase the chartered capital to VND 1,500 billion. However, Vinare’s Chairman Trinh Quang Tuyen said that the corporation has not had any plans to increase capital by calling for more money from existing shareholders.


The Vietnam Construction and Import-Export Joint Stock Corporation VCG, is sure about the failure issuance of shares to existing shareholders that kicked-off in late-2008. VCG market price, on January 14, 2009, was reportedly at VND 15,900/share, while the share price set for existing shareholders is VND 20,000/share. Early March is the deadline for shareholders to pay money to purchase additionally issued shares. However, a leader of the corporation said that VInaconex will have to find another way to increase capital.


Most recently, SAFI, a shipping agent, has announced about the shareholders’ opinion collection on the delay of issuing shares to existing shareholders in 2008, with the ratio of 1:1, at VND 15,000/share.


The State Securities Commission has not released any official figures about how many companies failed to mobilize capital under the licensed projects. However, the above mentioned examples could show the market situation.


In many reports and at many forums, warnings about the ‘dilution’ of shares, which will badly affect the EPS, have been repeated all the time.


The State Securities Commission, in the latest dispatch sent to public companies, also asked the companies to take caution with the share issuance plan to increase chartered capital in 2009. The commission has advised companies to consider thoroughly the share issuance plan and the issuance scale, reminding that the issuance project and the capital use need to be discussed at the shareholders’ meeting.


In 2008, a lot of small shareholders complained that they failed to vote against the share issuance to increase capital. Meanwhile, analysts believe that in current conditions, even big shareholders would also not agree on plans to issue additional shares.