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EVN confident of premium for IPO shares

Update: December, 19/2007 - 00:00

EVN confident of premium for IPO shares

(20-12-2007)

HA NOI — Electricity of Viet Nam is confident that its Initial Public Offering of shares in its Da Nhim – Ham Thuan – Da Mi hydro power stations will sell at a premium.

The IPO is scheduled for January or February as foreign investment funds increase their investment in "good" shares, including the power industry, during the first quarter, predicts EVN’s Equitisation and Securities Division, Dang Phan Tuong.

Major investors consider electric shares safe, he said.

Although they are not a yet a priority of domestic investors, they remain atop the list for international share buyers.

But market watchers are not as optimistic about the impending launch - intended to raise VND4.78 trillion (US$300 million) - although they agree the signals for major investors to buy are positive.

These include the Government’s plans to increase electric prices from next July and allow the market to rule without State intervention by 2010.

But they warn that the prospective price hike is not enough to compensate for the industry’s costs.

IRS Securities marketing director Bui Ngoc Long said he does not expect foreign investment funds to be drawn to general power-industry shares.

Instead, they were likely to focus on new electric plants where the cost of maintenance should be insignificant.

Further, the supply of electricity-industry shares had already risen because of a boom in small-sized power plants financed through joint stock companies and this was likely to limit rises in share prices.

But electrical-industry shares were still thought a worthy long-term investment.

The latest Saigon Security Incorporate figures show that foreign investors hold high numbers of all electrical shares listed in the HCM City stock exchange.

The hold for VSH (Vinh Son - Song Hinh Hydro Power) is 22 per cent and for KHP (Khanh Hoa Power) and PPC (Pha Lai Thermal Power) 13 per cent each.

Electrical-industry shares were once considered blue-chip in both the listed and over-the-counter markets. — VNS

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