I see no bubbles to cause stock market reversal: SSI chairman

SSI Securities Corporation (HoSE: SSI) chairman Nguyen Duy Hung said he does not see any bubble that would cause the Vietnamese stock market to reverse, though it’s hard to predict the exact growth rate.

Hung made the statement at SSI's extraordinary general meeting of shareholders (EGM) on Thursday in response to shareholders' questions on market outlook.

He added that a good market is one where companies can raise capital. "That story is just beginning, with a series of companies preparing IPOs and capital increases."

"In SSI’s history, there has never been a case where the board of directors approved a private placement and, within two hours, it received investment commitments from domestic and foreign institutions, enabling the company to raise capital successfully," he shared.

Regarding stock market status reclassification, Hung said there is more than a 90% chance that Vietnam will receive an upgrade in October. However, he cautioned that investors should not view the upgrade as a miracle that will trigger an explosive market rally.

The upgrade, he said, is simply a certificate recognizing that Vietnam’s market has reached international standards. Before or after the upgrade, the market fundamentals remain the same.

"What matters is that Vietnam has taken the right steps and has been recognized internationally as meeting the required standards."

Vietnam has been on FTSE Russell’s watch list for a potential reclassification from “frontier” to “secondary emerging” market status since September 2018. An October upgrade is highly likely, according to many analysts.

The EGM of SSI seeks to get shareholder approval for a plan to issue additional shares to existing shareholders.

SSI will issue 415.6 million shares to existing shareholders at a ratio of 5:1 (for every 5 shares held, shareholders receive the right to purchase one new share).

Given the offering price of VND15,000 ($0.57) per share, the broker is expected to raise VND6,234 billion ($236.15 million) to supplement margin lending capital and invest in bonds, certificates of deposit, and other valuable papers at a ratio determined by the board of directors.

Upon completion, the company’s charter capital will rise to VND24,963.5 billion ($945.66 million).

Previously, SSI had issued 104 million private placement shares to professional securities investors, equivalent to 5.28% of its total outstanding shares.

At the offering price of VND31,300 per share, SSI raised more than VND3,256.5 billion ($123.36 million) in proceeds, increasing its charter capital from VND19,739 billion to VND20,779 billion ($787.11 million).

Chairman Hung said the company will implement the capital-raising plan immediately after shareholders approve it, with execution expected to be swift as procedures have already been streamlined.

He noted that Vietnam’s stock market has seen remarkable growth, particularly in liquidity. In a rising market, he said, corporate capital raising activities such as IPOs and new listings have yet to occur.

Therefore, capital raising among institutions will likely surge, liquidity will remain high, and investor demand will increase. In such a promising market, securities firms need to raise capital to have the scale required to meet overall market demand as well as their own business needs, he argued.

Achieving 90% of year's business target after 9 months

At the meeting, SSI’s leadership noted that the stock market has experienced mixed fluctuations, particularly trends influenced by tariff-related news.

Although Q2 began on a negative note, positive developments in trade agreements fueled a strong market rebound.

Against this backdrop, SSI reported favorable business results. In the first six months, consolidated pre-tax profit reached VND2,300 billion ($87.12 million), up 12.1% year-on-year, fulfilling 54% of the year's plan.

CFO Nguyen Thanh Ha noted that in the first nine months, the company is estimated to have achieved 90% of its business plan. If market conditions remain favorable, SSI could exceed its year target by 15-20%.