On the Over-the-counter (OTC) market, the prices of many bank stocks have fallen below market prices, some are even listed at 3,000 4,500 dong per share.
For example, the stock price of Viet A Commercial Joint Stock Bank (VABank) is only 3,500 dong per share; of Vietnam Public Joint Stock Commercial Bank (PVCB) is 3,900 dong per share; of Bao Viet Commercial Joint Stock Bank (BVBank) is only 4,500 dong per share, etc.
According to Nguyen Hung an investor on MBS floor, compared to the peak period, the prices of bank stocks have dropped dramatically. In particular, at its peak time, the stock price of Orient Commercial Joint Stock Bank (OCB) was 12,500 dong per share. After finalising the list for bonus share and call option distribution (nearly 50 percent), the price of this stock has decreased to 9,000 dong per share.
Based on the data published on OTC market, the stock prices of some banks are currently very cheap but have no liquidity.
“The reason investors are being cautious about the shares of these banks is because they are worried that these bank have developed credit too quickly in the early months of 2019, and until now, the bad debt situation of them has yet to be valued comprehensively,” said Hung.
Meanwhile, according to banking and financial expert Nguyen Tri Hieu, the not positive growth of bank stocks in the recent time has mainly come from the general movements of the stock market as the market was fairly gloomy in the first six months of this year.
In addition, investing in bank stocks is no longer very attractive to investors as before. Although the figures on the books of many banks are very rosy, in fact, their asset quality is not high, bad debts tend to increase and have not really been handled satisfactorily.
The Capital Adequacy Ratios (CARs) of some banks are very high on their books, but these numbers are not really reliable; and if the Circular 41/2016/TT-NHNN is applied in the next year, the CARs of many banks may even fall below eight percent. Meanwhile, the bad debt classification and provisions of some banks still have many problems, etc.
“There are many professional investors, investment funds, financial institutions and even banks investing in each other’s stocks, etc. Since these investors are very knowledgeable about banks, when they rate bank stocks prices low or even below par value, it means that their view of banks’ health in the future is not very bright,” said Hieu.
