Stocks suspended, investors suffer

A few days after Tan Tao Investment and Industry Corporation’s ITA shares were suspended from trading because the company violated its information disclosure obligations, many investors holding these shares on forums expressed great concern. Because hundreds of millions, even billions of their dong were almost “frozen” because the shares could not be bought or sold, while this was not the investors’ fault at all.

"Stuck" investors

According to a reporter from the Lao Dong Newspaper, recently, many stocks of once-famous enterprises have been suspended from trading or even delisted due to violations of regulations.

For example, HNG shares of Hoang Anh Gia Lai International Agriculture Joint Stock Company, HBC of Hoa Binh Construction Group Joint Stock Company were forced to delist. Other stock codes such as TNA of Thien Nam Import-Export Trading Joint Stock Company, LEC of Central Power Real Estate Company and DRH of DRH Holdings Joint Stock Company were changed from restricted trading to suspended trading...

According to the Ho Chi Minh City Stock Exchange (HoSE), the stocks that were forced to be delisted were mostly due to the companies having suffered losses for three consecutive years. Meanwhile, the stocks that were suspended from trading were mainly due to the companies continuously violating the obligation to disclose information as prescribed. It is worth noting that before receiving the penalty, these trading codes attracted many investors to buy and sell.

Typically, ITA was once a popular stock, with strong price fluctuations. In the period 2020-2022, ITA skyrocketed from the price of 2,000 VND to nearly 20,000 VND and then reversed and plummeted. Recently, when there was news that ITA was suspended from trading, investors rushed to sell off, and this stock plummeted for many consecutive sessions before stopping trading on September 26 at the price of 2,350 VND/share. Up to now, many investors still have headaches with this stock because they do not know when it will be able to be bought and sold.

Many investors "stuck" with stocks that have been suspended or delisted can only lament because they mistakenly bought "junk stocks". Some people post ads to sell stocks on forums at super cheap prices, hoping to recover some of their capital. "Some shareholders want to transfer 260,000 H. shares, priced at VND800 million; 380,000 shares priced at VND1.7 billion..." are the desperate advertisements of investors on some forums.

There are currently many stocks on the stock exchange that are under warning, control, and even on the verge of being suspended from trading or delisted. The common point of these stocks is that their prices have dropped to a very low level, below 5,000 VND. Some stocks are even less than the price of a cup of iced tea on the sidewalk because the business situation of the company is quite bad and has a lot of debt.

Mr. Hoang Thanh (living in Ho Chi Minh City), an investor who has just decided to cut losses on more than 20,000 TTF shares of Truong Thanh Wood Industry Group Joint Stock Company, said: "I bought this code at the beginning of 2022 at the price of 11,000 VND. When the price of this stock peaked at 17,000 VND in April 2022, I saw many predictions that the price could exceed 20,000 VND, the company is in a drastic restructuring phase, so I did not rush to sell. After that, TTF suddenly plummeted. Still believing that the company could recover, I bought more shares a few times to average the price. However, the price of this stock continued to fall and is now only 3,400 VND."

According to Mr. Thanh, recently, HoSE has continuously reminded businesses because of the delay in announcing the 2024 semi-annual financial report, the delay in announcing information explaining the difference in after-tax profit on the 2024 semi-annual audited financial report, and maintaining the warning status because the business has accumulated losses of more than VND 3,200 billion... "I was worried that TTF shares would be delisted, so I decided to cut losses by up to 70%" - he said sadly.

Investors need to learn carefully about the business before deciding to buy stocks to avoid future consequences.

Be sober when choosing stocks

Regarding the issue of stocks being fined and investors being affected, Mr. Truong Hien Phuong, Senior Director of KIS Vietnam Securities Company, said that when conducting production and business activities and listing on the stock exchange, no enterprise wants its stocks to fall into a situation of being suspended, restricted from trading or forced to delist.

"Enterprises that produce and operate inefficiently and suffer losses are due to many objective and subjective reasons. Enterprises that do not disclose information fully or do not report their financial statements on time will be questioned by management agencies and investors about the transparency of their management. At that time, investors need to consider selling their shares to avoid risks. Because the publication of quarterly and annual financial reports is very important, reflecting the ability of the enterprise to operate continuously. This also explains why management agencies often warn and remind units that are slow to disclose information," Mr. Phuong analyzed.

Personal finance expert Le Xuan Huy said that before a company's shares are restricted and suspended from trading, stock exchanges often warn investors. Therefore, investors need to be cautious with stocks that are warned; it is also important to note that some companies have not hired a new auditor and have requested an extension to submit reports for various reasons.

"Restricting and suspending stock transactions are necessary sanctions of the management agency when dealing with listed companies that violate the law. Investors need to consider avoiding such stocks during the investment process. Not only small companies' stocks with low par value but also large stocks can fall into this situation if the company's operations arise risks. Investors need to be clear-headed to sell in time, instead of "holding" the stocks until they are suspended or delisted forcibly" - Mr. Huy emphasized.

According to experts, stocks are an investment channel with good returns and are increasingly popular. However, before choosing to buy stocks, investors should carefully research the company.

"It is necessary to learn about investment strategies, production and business results; more deeply analyze financial reports, business results reports, cash flow reports..., see if the business's cash flow is stable, if production and business results are good, if the board of directors or the business has ever violated any information disclosure..." - Mr. Truong Hien Phuong recommended.

The key to building trust

Mr. Nguyen Thanh Long, General Director of HD Fund Management Company (HDCapital), said that more than 10 years ago, less than 10% of listed companies met information disclosure standards. By 2018-2019, this rate had increased to 40% and is now reaching 60%.

According to Mr. Long, there has been a surprising transformation in investor relations (IR) activities, but there is still a clear differentiation in the level of IR implementation between large and small enterprises. In small enterprises, the IR department is often assigned to the accounting and finance department, which cannot be as professional as a well-trained team. Notably, companies in the finance, banking, and insurance sectors often have better IR activities than some other sectors such as real estate or construction.

"Effective IR activities play an important role in building and maintaining trust with institutional investors, thereby directly affecting their investment decisions. Transparency, accuracy, and fairness are the keys to building trust with investors in the long term, as well as fairness in treating shareholders," Mr. Long said.

Source: https://nld.com.vn/co-phieu-bi-dinh-chi-nha-dau-tu-lanh-du-196240929190924688.htm