Bank Shares Remain Attractive To Investors

There are doubts about the possibility of price increase of banking stocks. This is understandable because bank stocks, after the strongly rally at the beginning of the year, are moving sideways.

Although that is the general situation, in the group of bank shares, not all shares are as high as those of Vietcombank, TPBank, and Techcombank (on OTC), so many investors still expect in the stock group that has not increased much, though the optimism level is not as high as before.

Le Van Hoa, a long-time investor in the stock market said he has been interested in bank stocks but only targets at stock codes in retail sector. However, recently, the market price of the finance sector has increased remarkably, so he did not want to ignore the opportunity to make profits.

Accordingly, Hoa seeks for shares of banks that are about to list such as TPBank and shares of banks that are expected to list at the end of the year such as OCB, VIB. He explains that the share price of banks that listed in the bourse has increased quite high over the last period and opportunities still remain with stocks that are about to list on the bourse, so he decided to invest, with the hope that after listing, these King stocks will have reasonable price increase.

Specifically, TPBank will officially list on Hochiminh city stock exchange (STC) on April 19, at the starting price of 32,000 dong per share. OCB is expected to list on the bourse at the end of this year.

There are many reasons for investors to believe that King shares will continue going up, of which, there must mention the operation results of the banking sector in the past year with many bright colours, and many banks have set strong growth target this year. At the end of Q1/2018, most banks have reported impressive profit figures with around one trillion dong.

For example, MB earned 1.6 trillion dong pre-tax profit in the first quarter of the year. HDBank attained more than 1.045 trillion dong. Other banks also gained impressive results such as OCB with 600 billion dong, TPBank with more than 500 billion dong and VIB with 500 billion dong.

Besides, the business targets set by banks in this year are also about tens of trillion dong pre-tax profits such as VPBank, Techcombank, ACB, Vietcombank, and HDBank with 10 trillion dong, 10.1 trillion dong, more than 5.660 trillion dong, 12 trillion dong and nearly four trillion dong respectively. This has positively influenced on King stocks.

Not only listed bank shares are eyed by investors but also shares that are being transacted on OTC. Specifically, Vietcombank’s auction of the remaining shares at OCB drew the attention of many investors with eight institutional investors and 669 individual investors.

The total registered amount was 73,304,144 shares, more than 11 times higher than the amount of shares that Vietcombank wants to sell.

Under the plan, this share auction will take place on April 17, 2018. Recently, OCB organised the annual general meeting (AGM) 2018 to approve the two trillion dong profit plan in this year, showing the desire to list shares on STC while planning to establish finance company and increasing chartered capital to 7.5 trillion dong from the current amount of five trillion dong.

That is not to mention, some bank shares that are about to list are also sought by investors such as Techcombank, VIB. Of which, Techcombank shares increased quite highly to more than 100,000 dong per share. On April 13, Techcombank had an IPO attracting many large global funds, with the target of calling for $864-$992 million, at the selling price of about 120,000 dong128,000 dong per share.

Currently, Dragon Capital, GIC and Fidelity of the US are negotiating to become the major investor. This deal will be larger than the $700 IPO of Vincom Retail last year.

After IPO, Techcombank is expected to be valued at about $6.1-6.5 billion, being one of the top 10 biggest listing companies in the country.

In March 2018, the US’s Warburg Pincus agreed to invest more than $370 million in Techcombank, becoming the largest private share investment deal of this fund in Vietnam.

Thanks to large demand, key investors who account for about 76 percent IPO stake were distributed, much higher than other IPOs. The deadline of the price finalisation in the IPO was April 23 and Techcombank is expected to list on June 4.

Prior to Techcombank, HDBank earned more than $300 million in the sale of more than 21 percent stake to foreign investors after officially listing on the bourse at the beginning of 2018. Some other banks such as TPBank, OCB also said they will soon finalise foreign room with foreign strategic partners before and after listing.

 

Category: Finance, Vietnam

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