shares rise; analysts stay sceptical
HA NOI — Bank stocks are
showing signs of recovery on the back of heavy trading volume on both exchanges
and over-the-counter (OTC), or unlisted, trading.
However, analysts are
sceptical about how long the trend will last.
Two listed banks,
Sacombank (coded STB) and Asia Commercial Bank (ACB) recently rebounded by up to
45 per cent and 64.2 per cent respectively compared to their share prices two
Yesterday, STB share
prices closed at VND28,200, up 9.73 per cent against Friday’s session, and ACB
reached VND80,900, up 10.22 per cent.
On the OTC market, bank
shares in general have rebounded about 10 per cent after slipping 80-90 per cent
or more since the start of the year.
Shares of more than 10
banks are traded on the OTC market. Prices of Vietcombank shares at
www.sanotc.com range from VND57,000-58,000 compared to VND29,000 two months
Military Bank shares are
trading at about VND22,000- 23,000, up 33 per cent against prices last week.
At Rong Viet Securities
(Viet Dragon) yesterday, Eximbank’s shares were traded at VND27,000, up from
VND25,000 per share last Friday.
These prices were quite
reasonable for short-capital investors, said Tran Thi Bich Phuong from Gia Quyen
drives them up?
Some bankers say the OTC
stocks are more likely to increase because of a similar upward trend of the
"The mild recovery of
bank shares is following the general up-trend of the stock market, not any other
factor. Only God know how long the trend will last!" said Nguyen Thanh
Toai, deputy general director of Asia Commercial Bank.
However, observers also
believe the easing of the credit crunch, plus regulative changes by the
Government and bids by foreign partners for more control of local banks,
provided the momentum for the mild recovery.
"Of course, these
changes partially improve investor confidence in bank stocks. The easing of the
credit crunch is likely to be the most important contributor," said Phan
Anh Tuan, securities analyst with VincomSecurities.
"up" trend in these stocks would improve if lending for mortage
investments had not frozen because of a number of factors, Tuan added.
Do Hoai Nam, senior
analyst with Kim Long Securities, said the mild rebound came at a good time for
many investors, considering that the State Bank had paused granting licences to
new commercial banks.
This is expected to reduce
the competitiveness of existing banks to some extent and to stabilise the volume
of bank shares on the OTC market.
The central bank,
moreover, has not set a new date to grant licences again as it needs a certain
time to adjust the regulations as well as criteria.
This means no more new
bank stock will debut, or dilute, the bank stock market in the near future.
Moreover, the central bank
has also given the green light for joint-stock banks to buy back their own
shares, which is considered important in supporting or raising prices for bank
shares throughout the share trading world.
regulative adjustments are believed to be creating a stable sentiment among
investors. And the stake moves in banks are also said to be momentum for the
modest spring-back of bank shares.
"But this is only
short-term. When bank bids are completed, prices will back to the original
standing if banks don’t perform better," Tuan said.
Bids for bank shares are
being made between Techcombank and HSBC, VP Bank and Singapore’s OCBC, ABBank
and Maybank (Malaysia), SeABank and Generale Societe (France), Southern Bank and
Foreign investment in
several local banks is believed to improve the performance of local banks –
from technology to staff quality and shares.
Techcombank last week sold
an additional 5 per cent of its holdings to HSBC, increasing its total stake to
20 per cent. Prices of Techcombank shares yesterday were up to about
VND28,000-30,000 per share (compared to VND18,000-19,000 each previously).
Nguyen Ho Nam, general
director of Sacombank Securities predicted that possibility of bank shares to
increase further was strong.
While many believe bank
shares always have potential, the tightening of monetary policies have
definitely resulted in an ongoing slowdown of credit growth - together with
Sacombank – a
good-standing local bank, for example, has to adjust its forecast revenue target
from VND2 trillion (US$119.76 million) down to VND1.5 trillion ($89.82 million).
Some sources say that many
banks face a serious rise in non-performing loans because borrowers had to
borrow at high interest rates. And, while inflationary pressures are still an
ongoing fear, the ability to pay back loans on time seems to be the really big
Le Xuan Nghia, director of
the central bank’s Department for Bank Development Strategy said that given
local banks had escaped from a temporary liquidity crisis, a loan crisis would
challenge them by the middle of next year.
A retailer holding STB
shares, Nguyen Ngoc Dung, countered that: "In any crisis, every bank will
be affected. However, for banks running proper and effective risk management
systems, such as Sacombank and ACB, losses will be minimised. So, shares of such
banks, personally, have a lot of potential."
Phan Anh Tuan from
VincomSecurities added that stock investors in Viet Nam did not have a long-term
outlook. "They mostly take care of what is happening now," he said.
However, even if people
are optimistic about bank stocks, history shows that they can rarely swim
against the tide of the whole stock market. — VNS