Implementing regulations of the Ministry of Finance in Circular No. 180/2015/TT-BTC that requires banks to list on Upcom (stock trading market of unlisted companies), most banks are urgently registering and listing at Vietnam Securities Depository Centre (VSD) and some banks plan to list on the official bourse in this year.
However, many banks had submitted to shareholders for their approval of the listing plan on Upcom but only a few banks took actions. Meanwhile, many banks still have not had plan to register trading on Upcom or on official stock exchange.
VietBank’s board of directors said with the immediate listing plan, banks will raise chartered capital in the first stage with about 500 billion dong and list on Upcom in this year. By 2020, banks will list on Hochiminh City Stock Exchange (STC).
Meanwhile, Nguyen Quoc Toan, Chair of Nam A Bank said at the 2015 annual general meeting, shareholders assigned the Board of directors to choose suitable moment to list. However, in 2015-2017, the market did not have favourable development and the attention to Nam A Bank’s shares was not enough for the bank to decide to list.
In this year, the stock market is more favourable, so Nam A Bank’s Board of directors submitted to shareholders for approval of the share listing, while assigning the Board of directors to choose suitable moment to list in accordance with the law’s regulations and orders.
Under the direction of the prime minister, all banks, either public or non-public, have to list on Upcom but not necessarily on the official stock exchange, in order to enhance transparency in share transactions.
*Listing on official bourses
Not only listing on Upcom but many banks have planned to list on official bourses to welcome rising trend of bank shares’ price.
Techcombank schedules to list on STC on June 4. Listing on STC, Techcombank expects to be evaluated at about $6.1-6.5 billion, being ranked among Top 10 listed companies in the country.
Trinh Van Tuan, Chair of OCB also said the bank is promoting the plan to list shares on STC. OCB’s Board of directors submitted to shareholders for their approval of listing plan.
Most recently, on April 19, TPBank listed 555 million TPBank’s TPB-coded shares at 32,000 dong each. TPBank’s market capitalisation reached 17.760 trillion dong, becoming the eight largest banks in capitalisation in the stock market.
Earlier, HDBank listed nearly 981 million HDB-coded shares on STC on January 5, 2018 at the starting price of 33,000 dong each and its shares have consecutively increased in the upcoming months.
Some banks such as VIB, KLB, and LienVietPostBank that have listed on Upcom also planned to list soon on STC.
Bank codes being listed on STC, HNX include HDB, VPB, VCB, CTG, BID, ACB, EIB, STB, MB, SHB, and TPB. Meanwhile, stock codes being transacted on Upcom consist of VIB, KLB, and LPB.
In the first quarter of this year, many banks such as VCB, ACB, MB, VPBank, Techcombank, CTG, etc. reported more than one trillion dong profit and aim at dozens of trillion dong profits for 2018, which is expected to have good impact on “King” shares.
However, financial analysts said with the shares expected to be listed on the bourse in the near future, not every code has growth potential but there will certainly have strong differentiation.
In addition, behind the massive capital increase of banks in 2018 is the worry of shareholders. The too fast capital increase will put pressure on stock dilution, resulting in slower growth in Earnings per share (EPS).
According to SSI Retail Research’s analysis, the current market valuation is not new. Though bank group has the Price to Earning (P/E) to be not so high, the Price to Book value (P/B) has already been very expensive compared to that at banks in the world.
Vietcombank’s P/B peaked at five times while the average of bank share groups has an average scale of just about 1.5 times. The P/B of bank codes such as BID, VPB, HDB and ACB exceeded three times. In that situation, the adjustment to a lower valuation was entirely very healthy and necessary for the sustainable growth of the stock market.
