Bosses of many large businesses spend trillions to ‘support’ stock prices

Due to the conflict in the Middle East, in the period March 1 – March 9, VN-Index, the index representing the Ho Chi Minh City Stock Exchange, decreased more than 228 points, to 1,652 points, the lowest since November last year. However, this index has also recovered about 76 points in the last two sessions.

After strong market fluctuations, many leaders and their family members registered to collect the company’s shares to “support the price” and reassure shareholders. It is estimated that 14 internal transactions may take place in the next month with a total amount of about 3,062 billion VND, calculated based on the market price of stocks on March 11.

The most notable deal is that of Mr. Tran Vu Minh, son of Mr. Tran Dinh Long, Chairman of Hoa Phat Group. This businessman plans to spend about 1,300 billion VND to “collect” 50 million HPG shares after HPG’s market price on March 9 hit a 6-month low.

Mr. Danny Le, Mr. Nguyen Phuoc Hung Anh Victor and Ms. Nguyen Thi Thu Ha are also about to spend an equally large amount of money, up to hundreds of billions of dong, to buy more shares of the company.

Among them, Mr. Danny Le, General Director of Masan Group, is about to collect 5 million MSN shares, estimated at nearly 400 billion VND. Before this businessman’s move, MSN’s market price fell to 68,300 VND per unit, the lowest in 9 months.

Similarly, Vietjet airline shares have also dropped about 30% from the peak. Faced with the above situation, Mr. Nguyen Phuoc Hung Anh Victor, son of billionaire Nguyen Thi Phuong Thao, registered to buy 2 million VJC units, equivalent to more than 300 billion VND.

Ms. Nguyen Thi Thu Ha, mother of Ha Do General Director Nguyen Trong Minh, also plans to spend about 139 billion VND to buy 5 million HDG shares. If the transaction is completed, Ms. Ha’s ownership ratio at Ha Do Group will be more than 1.35% of charter capital.

Many other businessmen are also willing to spend tens of billions of dong to increase ownership in the company, including Mr. Doan Nguyen Duc, Chairman of Hoang Anh Gia Lai; Mr. Nguyen Dung, General Director of SMC Steel; Mr. Doan Chi Thien, General Director of Nam Viet; Mr. Nguyen Van Dat, Chairman of Phat Dat… This is not a small amount of money, dozens of times higher than the average income per capita of a Vietnamese person, about more than 130 million VND per year.

Another special case is taking place at DIC Corp, when the family of Chairman Nguyen Hung Cuong has had more than tens of millions of shares sold since the beginning of the year. DIG’s market price has also decreased by 30% in the same period. Therefore, DIC Corp has planned to buy back treasury shares, up to 5% of the company’s capital, equivalent to a value of nearly 600 billion VND.

Talk to VnExpressMr. Nguyen The Minh, Director of Research and Development for individual customers of Yuanta Vietnam Securities, said that buying shares by insiders and major shareholders is common when the market fluctuates strongly. Previously, when scores dropped sharply in March and April 2022, Chairman of Tri Viet Group, CEO of Gelex, or Chairman of Dat Xanh also spent hundreds of billions of dong to collect company shares.

Yuanta Securities experts assess that this move can benefit all three parties, including businesses, shareholders and these leaders.

First, Mr. Minh said this action could be a message of reassurance, increasing shareholders’ rights and avoiding stocks being sold off when the market drops sharply. “In addition to increasing ownership, leaders consolidating goods at this time is also a signal that the business can pay dividends this year, when the annual meeting season is approaching,” this expert said.

Mr. Minh assessed that the owners’ increased spending at this time also helped reduce the proportion of shares floating in the market, improving the attractiveness in the eyes of investors and beautifying the books. Finally, for leaders, this can also be considered a profitable investment, when the price is deeply discounted.

However, Yuanta’s experts point out the fact that many large shareholders are using leverage (margin) to hold company shares. Increasing ownership can help them prevent business value from going down, avoiding massive mortgage sales like what happened at Novaland, Phat Dat or Hai Phat at the end of 2022.

“It’s also possible that this helps owners minimize the risk of margin calls,” Mr. The Minh said.