Due to the conflict in the Middle East, during the period from March 1 to March 9, the VN-Index, the index representing the Ho Chi Minh City Stock Exchange, dropped by more than 228 points, reaching 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 fluctuations in the market, many leaders and their families have registered to buy shares of the company to “support the price” and reassure shareholders. It is estimated that 14 internal transactions may occur in the next month with a total amount of about 3.062 trillion VND, based on the market price of the shares on March 11.
The most notable transaction is by Mr. Trần Vũ Minh, the son of Mr. Trần Đình Long, Chairman of Hòa Phát Group. This businessman plans to spend about 1.3 trillion VND to “accumulate” 50 million HPG shares after the market price of HPG dropped to a six-month low on March 9.
Mr. Danny Le, Mr. Nguyễn Phước Hùng Anh Victor, and Mrs. Nguyễn Thị Thu Hà are also about to spend a significant amount, reaching hundreds of billions of VND, to purchase additional shares of the company.
Among them, Mr. Danny Le, CEO of Masan Group, is about to accumulate 5 million MSN shares, estimated at nearly 400 billion VND. Following this businessman’s move, the market price of MSN has dropped to 68,300 VND per unit, the lowest in 9 months.
Similarly, shares of Vietjet Air have also decreased by about 30% from their peak. In light of this situation, Mr. Nguyễn Phước Hùng Anh Victor, son of billionaire Nguyễn Thị Phương Thảo, has registered to buy 2 million VJC units, equivalent to over 300 billion VND.
Mrs. Nguyễn Thị Thu Hà, mother of CEO Hà Đô Nguyễn Trọng Minh, is also planning to spend about 139 billion VND to buy 5 million HDG shares. If the transaction is completed, Mrs. Hà’s ownership ratio at Hà Đô Group will be over 1.35% of the charter capital.
Many other businessmen are also willing to spend tens of billions of VND to increase their ownership in companies, including Mr. Đoàn Nguyên Đức, Chairman of Hoàng Anh Gia Lai; Mr. Nguyễn Dũng, CEO of SMC Steel; Mr. Doãn Chí Thiên, CEO of Nam Việt; Mr. Nguyễn Văn Đạt, Chairman of Phát Đạt… This is a significant amount, several times the average annual income of a Vietnamese person, which is about over 130 million VND.
Another special case is occurring at DIC Corp, where the family of Chairman Nguyễn Hùng Cường has had to sell off more than ten million shares since the beginning of the year. The market price of DIG has also dropped by 30% during the same period. Therefore, DIC Corp has planned to repurchase treasury shares, up to 5% of the company’s capital, equivalent to nearly 600 billion VND.
Speaking to VnExpress, Mr. Nguyễn Thế Minh, Director of the Research and Development Division for Individual Customers at Yuanta Securities Vietnam, stated that the purchase of shares by insiders and major shareholders is a common sight whenever the market fluctuates sharply. Previously, when the index dropped significantly in March and April 2022, the Chairman of Trí Việt Group, CEO of Gelex, and the Chairman of Đất Xanh also spent hundreds of billions of VND to accumulate company shares.
Experts from Yuanta Securities assess that this move can benefit all three parties involved: the business, shareholders, and the leaders themselves.
Firstly, Mr. Minh noted that this action could serve as a reassuring message, enhancing the benefits for shareholders and preventing shares from being sold off during a sharp market decline. “In addition to increasing ownership, leaders accumulating shares at this time also signal that the company may pay dividends this year, as the annual meeting season is approaching,” the expert said.
Mr. Minh believes that the owners’ increased spending at this time also helps reduce the floating share ratio in the market, improving attractiveness in the eyes of investors and enhancing the balance sheet. Finally, for the leaders, this can also be seen as a profitable investment, as prices have been significantly discounted.
However, the Yuanta expert pointed out that many major shareholders are using leverage (margin) to hold company shares. Increasing ownership can help them prevent the company’s value from declining and avoid a massive sell-off like what happened with Novaland, Phát Đạt, or Hải Phát at the end of 2022.
“This could also help the owners minimize the risk of margin calls,” Mr. Thế Minh commented.