Wednesday, May 24 2017

VietNamNews

SOEs to divest from banks on positive market outlook

Update: March, 06/2017 - 12:00
State-owned enterprises are seeking to divest from commercial banks this year on positive forecast for the stock market. — Photo british-utilities.co.uk
Viet Nam News

HÀ NỘI  Many State-owned enterprises are seeking to divest from commercial banks this year, as forecasts for the local stock remain positive.

Both The Vietnam Posts and Telecommunications Group (VNPT) and Vietnam Bank for Agriculture and Rural Development (Agribank) plans to auction their holdings in Maritime Bank and Ocean Bank (OCB) in March.

VNPT has registered to offload its entire holding of 71.6 million shares in Maritime Bank at the starting price of VNĐ11,900 (US$0.52) per share, equivalent to 6.09 per cent of the bank’s capital, in an auction scheduled for March 10.

The move is in line with the direction of Deputy Prime Minister Vương Đình Huệ to urge the telecommunication group to divest from its listed member companies.

On a smaller sale, Agribank will sell 390,665 shares in Ocean Bank during an auction in mid-March. The starting price is set at VNĐ10,200 per share.

Mobifone, one of the three largest mobile network operators in Việt Nam, also plans to divest from Southeast Asia Commercial Bank (SeABank) and Tiên Phong Bank (TPBank) this year, after the failure in 2016.

In April last year, Mobifone put up its entire holding of 33.4 million shares of SeABank, equivalent to 6.12 per cent of the bank’s capital, for sale at the initial price of VNĐ9,600 per share, but no investors registered to buy.

The same month, it also registered to sell 14.28 million shares, or 2.57 per cent of TPBank’s capital, and successfully sold 61 per cent of this amount. Before the sale, the mobile network company held 4.76 per cent of TPBank’s capital.

According to VP Bank Securities Company (VPS), banks could be among top best performers on the securities market this year, driven by the intense restructuring process in the financial system, as well as the Government’s support policy of easing foreign ownership limits in commercial banks.

In addition, many small banks have plans of debuting shares on the stock market this year, and this would facilitate divestment from these banks.

“The VN-Index could climb to 780 points this year, on the average price-earnings (P/E) ratio of 17,” VPS wrote in a report.

The benchmark VN-Index gained 14.8 per cent in 2016, ending the year at 664.87 points. It has gained 7.2 per cent this year.

In the third quarter of last year when the stock market had perked up, dairy firm Vinamilk (VNM) successfully sold over 2 million shares in An Bình Bank (ABBank).

In December, Tân Thuận Industrial Promotion Co Ltd (IPC) and Saigontourist also successfully offloaded their entire holdings in SaigonBank.  VNS

 

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