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SCIC’s divestment boosts share prices, market soars

Update: December, 05/2017 - 09:00
Inside SCIC’s office in Hà Nội. — File Photo
Viet Nam News

HÀ NỘI — The State Capital Investment Corporation (SCIC) has confirmed it will continue its scheduled competitive share offerings in four companies in the latter half of this month, easing investor concerns over the possibility of a delay after it was yet to disclose the initial bidding prices for these companies as scheduled.

In November, the Government’s investment arm announced a series of State capital divestments from five listed companies, including Việt Nam Construction and Import-Export Joint Stock Corporation (Vinaconex), Tiền Phong Plastics Joint Stock Company (NTP), Bình Minh Plastic Joint Stock Company (BMP), Domesco Medical Import - Export Joint-Stock Corporation (DMC) and FPT Corporation (FPT).

By the end of last month, SCIC had only announced the initial selling price for Vinaconex (stock code VCG), which was set at VNĐ25,600 (US$1.12) per share, and had yet to announce bidding prices for four other companies as scheduled between November 27 and December 1.

SCIC will continue working on share offerings for these four shares, as stated at the November 17 roadshow, with no imminent disruption, a representative from SCIC told Việt Nam News by telephone, explaining it is awaiting information of companies for price announcement.

SCIC will auction 96.24 million shares of Vinaconex, equal to a 21.79 per cent stake of the company, on December 8 on the Hà Nội Stock Exchange. In the latter half of this month, it will continue offloading 37.1 per cent of capital at Tiền Phong Plastic, 29.51 per cent at Bình Minh Plastic, 34.71 per cent at Domesco Medical and 5.96 per cent at FPT Corp.

Share prices of these four companies quickly attracted investors’ attention and sharply increased in value following the divestment announcement.

BMP’s share price has increased 30 per cent in the past one month, from VNĐ73,000 per share to VNĐ95,000 ($4.2) on November 30. FPT’s share price was up 16 per cent to VNĐ58,400 ($2.2 to $2.59); DMC up 27 per cent from VNĐ104,000 to VNĐ132,000 and NTP up 17 per cent from VNĐ72,800 to VNĐ85,000.

This is not the first instance of the SCIC’s share offering taking a positive turn on a company’s market value.

After the SCIC’s auction of 48.4 million shares of Vinamilk on November 10, 2017, Vinamilk’s shares (VNM) increased its value from VNĐ151,000 per share to VNĐ173,800 ($6.7 to $7.75) with more than nine million shares being traded on the stock exchange on that day.

VNM price closed yesterday at VNĐ203,000 per share, a montly increase of 31 per cent.

Following the success at Vinamilk, on November 29, the Ministry of Industry and Trade announced an offering of 343.7 million shares for the State-owned Sài Gòn Beer Alcohole Beverage Joint Stock Company (Sabeco), equivalent to 53.59 per cent of its charter capital at initial selling price of VNĐ320,000 ($14.2) per share.  

After the divestment plan is announced, SAB shares rose sharply, from VNĐ190,000 to VNĐ339,000 per share ($8.45 to $15), becoming the most highly priced stock on the market, at present.  

If the offering of Sabeco’s shares is successful, the MoIT will collect at least VNĐ109.9 trillion ($4.8 billion).  

SCIC has made significant progress in its divestment, as it is interested in the bidding process to increase transparency, rather than just selling a majority stake to strategic investors, as before.

The SCIC wants to promote the competitive bidding process to enhance transparency in the divestment process, so that listed companies can be exempt from making a public bid, instead of being obliged to send a written letter of interest of purchase to the auction board seven days before any auction.

In addition, SCIC is considering asking for the Government’s approval to sell a majority of shares from its divesting companies for a better price than the market’s expectation. — VNS



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