Bank Shares to Flood Market This Year
Vietnam’s stock market is anticipated to see massive share issuances of joint stock commercial banks this year, which is becoming a great fear of investors for the market slump.
If urban commercial lenders boost their equity by 80 per cent each on average, they will have to issue combined 3.6 billion shares worth VND36 trillion (US$2.25 billion) this year. Meanwhile, HOSE had a total 4.3 billion listed shares as of March 30.
The State Bank of Vietnam said on its Website that the country has 33 urban lenders with combined capital of VND45.14 trillion as the end of March.
The privatization of state-owned banks and newly-founded ones will also pump billions of shares into the market.
With the strict government regulations, banks are forced to issue more shares to scale up their registered capital in 2008.
Under the current rule, a bank that wants to open a branch in the city has to grant its branch with VND100 billion instead of VND20 billion as previously. The loans for securities investment are limited to less than 20 per cent of banks' equity.
By 2010, all urban joint stock commercial banks are required to have registered capital of at least VND3 trillion. (Laborer)
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