Corporations enter bourse, aviation stocks about to take off

Published:  10:08 Wednesday - November 23, 2016

Corporations enter bourse, aviation stocks about to take off

The sharp price increase of aviation companies’ shares is attributed to their good business performance and investors’ high expectations for Airports Corporation of Vietnam (ACV), Vietnam Airlines and Vietjet Air.

SGN, NCT, SAS and NCS also saw prices increasing sharply late last week, which caught investors’ attention. Unlike speculative shares such as shares of real estate firms, securities and oil & gas companies, the shares of companies in the aviation sector attract less attention because there are not many choices for investors.

There are only seven companies which have shares transacted on the two official bourses and one unofficial trading floor. These include Noi Bai Cargo (NCT), Masco - MAS (a Da Nang-based airport service company), Sasco (SAS), Arimex (ARM), Aviprint (IHK), Noi Bai Catering Services (NCS) and SGN (Saigon Ground Services).

If ACV lists its shares on the bourse on November 21 as planned, the number would go up to eight.

Investors have not shown high interest in aviation shares because big shareholders hold controlling stakes and only a small proportions of shares are in circulation. 

Meanwhile, the modest margin rate offered by securities companies for aviation shares is another reason investors have been indifferent.

However, analysts believe that aviation shares are about to take off. Financial reports of the companies show very satisfactory business results in the first nine months of the year. SGN, for example, reported net profit of VND136 billion, a two-fold increase if compared with the same period last year. 

Meanwhile, Sasco has reported profit of VND140 billion, up by 11 percent, Masco VND35.4 billion, up by 32 percent, and Arimex VND5.54 billion, up by 29 percent.

However, not all enterprises had satisfactory business results. Noi Bai Cargo, after many years of witnessing impressive growth rates, saw profit fall. Its post-tax profit in the first nine months of the year decreased by 19 percent to VND205 billion.

With good business results and high potential for industry development, aviation share prices are expected to increase in the time to come.

The news that Sabeco and Habeco, the two largest brewers, will list shares on the bourse has caused brewers’ share prices to escalate. Analysts believe this will also happen with aviation shares when big corporations enter the bourse.

Vietnam Airlines, the nation’s flag air carrier, has had an IPO, while VIetjet Air, the only private airline, is arranging its IPO.  ACV will enter the bourse soon with the reference price of VND25,000 per share.

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