There are many banks planning to sell shares to foreign investors, after the success wave of 20172018.
At the press conference last weekend as well as at the 2019 Annual general Meeting of Shareholders at the end of April 2019, Nghiem Xuan Thanh, Chair of Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank)’s Board, said that it would continue to sell about 6.5 percent of shares. Subjects were mainly foreign investors.
Last year, the bank successfully sold about three percent of capital to GIC Private Limited from Singapore and existing foreign strategic shareholder Mizuho bank, collected 6.2 trillion dong.
Meanwhile, exchanging with BizLIVE reporter, Huynh Buu Quang, Chief Executive Officer of Vietnam Maritime JointStock Commercial Bank (MSB), said that the bank was carrying out the introduction and contacted with foreign investors in stock offering plan.
Currently, the bank implemented roadshow in Thailand, Singapore and Hong Kong in the next time, with the participation of many major financial institutions in the world.
Previously, in preparation for this offering, the bank spent 770 billion dong to buy nearly 70 million treasury shares, bringing the total number of treasury shares to 100.5 million units.
Earlier this year, the increase of foreign investor ownership in Military Commercial Joint Stock Bank (MB) was also mentioned at the general Meeting of Shareholders.
Accordingly, Luu Trung Thai, Chief Executive Officer of MB, said that in Q3/2019, the bank would offer 258.4 million shares separately and resell 47 million treasury shares held by MB. Subjects offered for sale were both domestic and foreign investors.
Previously, in 2017 and 2018, many Vietnamese banks offered to sell shares and achieved very positive results.
In which, HCM City Development Joint Stock Commercial Bank (HDBank) successfully sold 21.5 percent of shares to more than 76 foreign investors in late 2017. To buy this 21.5 percent of shares, foreign investors had to spend $300 million, equivalent to more than 6.8 trillion dong, created the second largest IPO in the history of Vietnamese banking system until that time.
In 2018, Vietnam Technological and Commercial Joint-Stock Bank (Techcombank) created a new record when successfully sold 164 million shares, equivalent to 14 percent of the bank’s charter capital to foreign investors. With the closing price of 128,000 dong per share, the bank collected 21 trillion dong (about $922 million), becoming the largest initial public offering of shares in Vietnam.
Similarly, in a series of other banks such as Vietnam Prosperity Joint-Stock Commercial Bank (VPBank), Tien Phong Commercial Joint Stock Bank (TPBank) and Vietcombank, the offers were successful in the period of 2017-2018, with high selling prices and helping banks to collect large surpluses.
It was also a factor contributing greatly to Vietnam’s leading Southeast Asia in terms of IPO value in 2018.
Does the prospect repeat?
It was the story of a few years ago. But now, will this phenomenon appear once again?
Looking at the stock market in general, from the beginning of the year until now, the stock price has mostly been looking for new bottoms.
In particular, the market price of shares on some listed banks dropped significantly compared to the selling price to foreign investors in the period of 2017-2018.
As the price of Techcombank’s shares (code TCB) after the split has fallen to nearly 20,000 dong per share; HDBshares of HDBank are only around 26,000 dong per share; VPB of VPBank is currently around 18,500 dong per share.
Meanwhile, with some cases that found partners like Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), the final outlook is still unclear. It has been two years since the information about the sale of shares with a large proportion to KEB Hana Bank (Korea), the progress of this deal has not been updated yet.
It can be said that the banks’ plans to find new capital are still unlikely to succeed.
Looking at the current stock market context and the actual price of bank shares after the foreign investors’ capital injection activities in the last year, it can be seen that in the short term, the 20172018 historical wave will be difficult to repeat.
Accordingly, although it is ready for offering plans, the time of specific implementation must still be one of the factors that have been carefully considered by banks.
