The bizarre events continue to unfold.

VietNamNet•14/09/2023

Capital lost 25%, nearly 30% of businesses changed ownership.

Hai Phat Invest Joint Stock Company (HPX), chaired by Do Quy Hai, continues to experience unusual trading activity after its shares are about to be suspended from trading.

On September 14th, Hai Phat Investment witnessed a surge in trading volume with over 83 million units traded, valued at 456 billion VND. With 304 million listed shares, the total trading volume on September 14th accounted for more than 27% of the real estate company's total shares.

Despite strong buying interest at the bottom, overwhelming selling pressure caused HPX shares to close at the floor price of 5,480 VND/share on September 14th, with over 12.6 million units remaining unsold at the floor price.

Selling pressure on Hai Phat Invest shares began on September 11th, causing the stock to fall to its floor price for four consecutive sessions, amidst the suspension of trading by the Ho Chi Minh City Stock Exchange (HOSE) on HPX, effective from September 18th.

In just four trading sessions this week, HPX shares have fallen 25%. Market capitalization has also evaporated accordingly.

Thus, selling pressure and bargain hunting occurred just before HPX's trading was suspended due to repeated violations of information disclosure obligations. The sluggish real estate market and heavy debt burden caused HPX's business to decline. HPX had been repeatedly warned by HOSE and placed under warning and then under control due to delays in submitting audited financial reports.

This is the second time Hai Phat Invest has witnessed such a large transaction.

Previously, on November 30, 2022, Hai Phat Invest recorded over 146.5 million shares, equivalent to nearly 50% of the total shares traded in a single morning. At that time, HPX shares surged to the ceiling price after 12 consecutive sessions of falling to the floor price.

At that time, Hai Phat Invest was considered the third real estate stock to be "rescued" after Novaland (NVL) of chairman Bui Thanh Nhon and Phat Dat Real Estate (PDR) rebounded after 17-18 consecutive sessions of falling to the floor price.

Hai Phat Invest is known as a major real estate developer in Northern Vietnam, having risen to prominence over the years. However, like many other real estate companies, HPX faced liquidity problems when the real estate market experienced a prolonged downturn and the bond market went into crisis following the events involving Tan Hoang Minh and Van Thinh Phat.

Similar to Novaland Chairman Bui Thanh Nhon, HPX Chairman Do Quy Hai has had tens of millions of HPX shares sold off through forced liquidation over a long period, reducing his ownership stake from over 40% (approximately 120 million shares) to just over 14% currently. HPX shares have fallen from over 26,000 VND/share at the end of October 2022 to around 4,000 VND/share at one point.

*Many real estate businesses are still facing difficulties in their operations.*

In August and early September 2023, HPX shares surged again due to expectations that real estate businesses had bottomed out and would overcome difficulties. However, the company's financial situation remains unclear as its audited financial statements have not yet been released.

Real estate stocks fall across the board; are challenges still far from over?

In the trading session on September 14th, many real estate stocks fell sharply. Novaland (NVL) decreased by 1,250 VND to 18,700 VND/share. Phat Dat Real Estate (PDR) decreased by 850 VND to 25,400 VND/share. DIC Corp. (DIG) decreased by 1,100 VND to 27,300 VND/share… Vingroup (VIC) decreased by 3,700 VND to 55,500 VND/share; Vinhomes (VHM) decreased by 3,100 VND to 49,000 VND/share; Vincom Retail (VRE) decreased by 100 VND, trading at 28,900 VND/share.

Real estate stocks faced significant downward pressure due to slow recovery signals in the real estate market, as well as a general downward trend in the stock market driven by profit-taking, concerns about the rising USD/VND exchange rate, strong net selling by foreign investors, and potentially weak business results in Q3 2023. On September 14th, the VN-Index fell 14.58 points (equivalent to a 1.18% decrease) to 1,223.81 points.

Recently, the government has introduced numerous fiscal and monetary policies to support the strong recovery of the economy , especially in the real estate sector.

Following the regular government meeting in August 2023, the government issued Resolution 144/NQ-CP, which includes an important provision requiring the State Bank of Vietnam (SBV) to review and adjust the risk coefficients for different real estate segments.

Resolution 144 also requires a review of regulations related to lending and investment in corporate bonds to ensure consistency and alignment with the policy for developing the corporate bond market.

Source