Investors and experts have hailed the Government’s adjustment of the initial public offering (IPO) roadmap by state-owned enterprises (SOEs) under the equitisation process, calling it a suitable reaction to market changes.
After several unsuccessful IPOs since March, Prime Minister Nguyen Tan Dung has asked the Ministry of Finance and the State Securities Commission (SSC) to adjust the IPO plan in order to balance supply and demand, reduce the threats of a volatile market and ensure investors’ interests as well as limit state budget losses.
As many as 40 enterprises have made IPOs with nearly 451 million auctioned shares since early this year, according to the Monetary Policy Department under the State Bank of Viet Nam.
In a short period of time, a large amount of shares were issued; whilst investment capital was limited, making auctions bored. The average share price of IPOs since March has risen little over the initial level. Even worse, withdrawal of investors has meant many enterprises had to conduct a second auction. Typical examples were Viet Nam Insurance (BVI) and the PV Insurance Company (PVI).
According to experts, while the securities market has not yet been recovered, if IPOs keep going on as scheduled, shares will be devaluated, causing losses to both the state and investors.
Nguyen Trong Dung, Vice Director of the Government Office’s Enterprise Reform Department revealed that to-be-equitised SOE capital scale is so huge that pumping more commodities into the securities market while supply is over demand will cause loss to the state.
Deputy Director of the Institute for Market and Price Research under the Ministry of Finance Ngo Tri Long agreed that the IPO roadmap applied to major SOEs should be adjusted.
On these ground, several commercial banks reconsidered their IPO itinerary.
From now to the year-end, four commercial banks, including the Bank for Investment and Development of Viet Nam (BIDV) and 21 SOEs are scheduled for equitisation, resulting in a large amount of money about to be injected into the market.
BIDV is preparing for its IPO, but the bank should think twice, no deadline is to be fixed and it is necessary to ensure an appropriate price which will not only benefit the State but also ensure employees’ interests, said BIDV General Director Tran Bac Ha.
This message was echoed by Minister of Finance Vu Van Ninh, who said enterprises’ IPOs should be based on the market’s demand. The process of SOE equitisation will continue to be conducted as defined in a Prime Minister decision, but to-be-equitised enterprises should take time preparing IPOs, the minister added.
In 2007, as many as 20 SOEs, including the Ha Noi Beer Corporation, the Sai Gon Beer Corporation, the Viet Nam Commercial Bank (VCB), the Mekong Delta House Development Bank, the House Development and Investment Corporation and the Ha Noi Urban Development Corporation are set for equitisation. The number should top 71 by 2010.
Source: VNA
Showing posts with label MHB. Show all posts
Showing posts with label MHB. Show all posts
Thursday, August 09, 2007
Friday, June 22, 2007
Bank equitization faces delay
Four major State-run commercial banks are seen going public later than scheduled, said Le Xuan Nghia, director of the State Bank of Vietnam's Development Strategy Department.
He told 70 EuroCham members and other participants at the Banking Equitization: Going Global" luncheon in HCMC on Tuesday that the initial public offerings (IPO) by these banks would be a little later than expected due to problems with finding strategic shareholders and sharing price.
The Bank for Foreign Trade of Vietnam (Vietcombank), the Bank for Investment and Development of Vietnam, the Industrial and Commercial Bank (Incombank) and the Mekong Delta Housing Development Bank earlier planned to launch IPOs by this October.
Tumbling blocks have also arisen as to selling shares to staff of these banks.
Nghia explained strategic investors considered the offered share prices too high. The Government has ruled prices for strategic investors are based on the average price at IPOs.
This rule might undergo change, Nghia said at the luncheon organized by the European Chamber of Commerce in Vietnam (EuroCham). Therefore, there will be share auctions for only strategic investors before the IPOs.
However, he pointed out selling shares to staff of the four banks as a complicated issue that remains to be solved. He said there had been heated discussions about the staff's interests regarding to the number of their working years and shares for them as well as the interests of staff at the parent companies and subsidiaries.
He acknowledged that all the "humanitarian" issues were a hard nut to crack.
The Government permits the price of shares for staff to be 60% of the price set at public auctions.
There is a plan to equitize the Bank for Agriculture and Rural Development from 2008 and this job should be done by 2009, he said.
Nghia said the Government wanted to improve corporate governance for the banking sector through the equitization of the State-run banks.
Nghia stressed that Vietnam was implementing its commitments to the World Trade Organization and that the bilateral trade agreement with the US, under which the financial market will be opened up to foreign investors.
The Government allows foreign banks with total assets of at least US$20bil to open branches in Vietnam, and those with US$10bil or more to establish 100% foreign-owned banks and joint ventures with local banks.
Nghia said there were now six applications for opening, 100% foreign-owned banks but around 33 applications for new local banks.
Source: VNE
He told 70 EuroCham members and other participants at the Banking Equitization: Going Global" luncheon in HCMC on Tuesday that the initial public offerings (IPO) by these banks would be a little later than expected due to problems with finding strategic shareholders and sharing price.
The Bank for Foreign Trade of Vietnam (Vietcombank), the Bank for Investment and Development of Vietnam, the Industrial and Commercial Bank (Incombank) and the Mekong Delta Housing Development Bank earlier planned to launch IPOs by this October.
Tumbling blocks have also arisen as to selling shares to staff of these banks.
Nghia explained strategic investors considered the offered share prices too high. The Government has ruled prices for strategic investors are based on the average price at IPOs.
This rule might undergo change, Nghia said at the luncheon organized by the European Chamber of Commerce in Vietnam (EuroCham). Therefore, there will be share auctions for only strategic investors before the IPOs.
However, he pointed out selling shares to staff of the four banks as a complicated issue that remains to be solved. He said there had been heated discussions about the staff's interests regarding to the number of their working years and shares for them as well as the interests of staff at the parent companies and subsidiaries.
He acknowledged that all the "humanitarian" issues were a hard nut to crack.
The Government permits the price of shares for staff to be 60% of the price set at public auctions.
There is a plan to equitize the Bank for Agriculture and Rural Development from 2008 and this job should be done by 2009, he said.
Nghia said the Government wanted to improve corporate governance for the banking sector through the equitization of the State-run banks.
Nghia stressed that Vietnam was implementing its commitments to the World Trade Organization and that the bilateral trade agreement with the US, under which the financial market will be opened up to foreign investors.
The Government allows foreign banks with total assets of at least US$20bil to open branches in Vietnam, and those with US$10bil or more to establish 100% foreign-owned banks and joint ventures with local banks.
Nghia said there were now six applications for opening, 100% foreign-owned banks but around 33 applications for new local banks.
Source: VNE
Monday, May 28, 2007
Deutsche Bank to advise Mekong Housing Bank in IPO
German-based Deutsche AG Bank’s arm in Singapore has entered into a deal with a Vietnamese state-run bank MHB to offer consulting services for the local bank’s share auction set for this year. Under the deal signed last Friday, Deutsche Bank AG Singapore and its sub-contractors will consult MHB – the Housing Bank of Mekong Delta – with evaluation for their initial public offering (IPO) and listings on the local stock exchange.
The consultation is expected to be completed in October, paving the way for the bank to launch its IPO.
Mekong Delta Housing Development Bank had assets of VND18.8 trillion ($1.2 billion) by the end of last year.
It has opened its branches in Vietnam since 1992 and is now waiting for approval from the Vietnamese central bank to buy a 20 percent stake in the Hanoi-based bank.
MHB provides financial services for home buyers and small-to-medium sized enterprises with 140 branches in over 32 provinces in Vietnam.
Last year, the bank posted total capital of VND19 trillion (US$1.2 billion) with an annual growth of 50-60%.
Source: Thanh Nien
The consultation is expected to be completed in October, paving the way for the bank to launch its IPO.
Mekong Delta Housing Development Bank had assets of VND18.8 trillion ($1.2 billion) by the end of last year.
It has opened its branches in Vietnam since 1992 and is now waiting for approval from the Vietnamese central bank to buy a 20 percent stake in the Hanoi-based bank.
MHB provides financial services for home buyers and small-to-medium sized enterprises with 140 branches in over 32 provinces in Vietnam.
Last year, the bank posted total capital of VND19 trillion (US$1.2 billion) with an annual growth of 50-60%.
Source: Thanh Nien
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