FIEs Rush To List Shares On Vietnams Stock Market

VietNamNet Bridge - As Vietnam’s stock market has become increasingly attractive to foreign-invested enterprises (FIEs), many of them are planning IPOs (initial public offering) and listing shares on the Hanoi and HCM City exchanges.

Many FIEs want to list shares on Vietnam's stock market

Jollibee Foods Corp from the Philippines is going ahead with an IPO for its Highlands Coffee chain by 2019. In 2017, Siam Brothers, a rope manufacturer from Thailand, listed its shares at the HCM City Stock Exchange.

Nhip Cau Dau Tu quoted sources as reporting that shares of Vietnam Fortress Tools, another FIE that provides gardening tools from Taiwan, would debut on the bourse in the time to come. The total assets of the world’s second largest manufacturer in the field reached VND1.193 trillion in 2017.

An analyst commented that foreign investors were choosing Vietnam to set up production bases, but also listing shares. This is good news for Vietnam, which wants foreign investors to retain profits in Vietnam for re-investment in the country.

In addition, the decisions by FIEs also show the attractiveness of the market. 

According to Vi Nguyet Cam from Fortress Tools, the company has demand for capital to expand its production so it will list on the Vietnam bourse.

With its capitalization value of $50-60 million which may double in the next three years, Fortress may be listed among mid-cap shares in Vietnam. 

Meanwhile, if listing shares on other large markets, Fortress Tools would be listed as micro-cap only, which would make it more difficult to compete in raising funds.

The Vietnam stock market has experienced a prosperous year and jumped to the third position, accounting for 18 percent of MSCI’s (Morgan Stanley Capital International) frontier markets’ basket of indicators, just after Argentina and Kuwait.

The analyst said Vietnam can satisfy nearly all the requirements to be eligible for emerging market status. The upgrade is expected to occur in one or two years.

The foreign capital has been flowing into the Vietnamese stock market since the beginning of the year, helping the VN Index climb to an historic peak of 1,200 points.

A report showed that by mid-March 2018, the total net purchase of foreign investors had reached $485 million, equal to 40 percent of the net purchase of 2017 ($1.2 billion), even though the P/E ratio is considered high, at 21.

The investors’ high confidence in Vietnam’s economic prospects and businesses’ performances have prompted the buying of stocks. ADB (Asian Development Bank) predicted that Vietnam’s GDP may grow by 7.1 percent this year to become the region’s fastest-growing economy.

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