The state-run Wires and Cables Company (Cadivi) Tuesday sold 3.42 million shares at the average price of VND185,000 per share, higher than many investors’ expectation. Cadivi obtained 635 billion VND (39.5mio US$) from the auction in the Ho Chi Minh City Securities Trading Center.
The stocks, making up for 21.4% of the total, offered to outsiders at the starting price of only 11,000 VND per unit.More than 4,000 investors registered to buy 44.6 million shares, 22 times higher than supply.
Market analysts had commented that the price of Cadivi’s shares could be from 100,000 VND to 120,000 VND but its price was 185,000 VND – much too high promoted by oversubscription. Only 253 individual investors won the auction with the lowest price of 152,600 VND per share and the highest price of 44.6 million VND per share.
Some experienced investors said they did not want to participate in the initial public offering because prices were pushed too high by individual investors, who were often driven by the ‘herd’ mentality.
After selling shares, the state will still hold 63% of Cadivi’s stake.It expected to reach this year’s turnover of 1.09 trillion VND (67.9mio US$) with 17 billion VND (1.05mio US$) in profits, a year-on-year jump of 30%.
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