Vietcombank IPO not for little fish

How expensive Vietcombank’s shares will go for is the current hot topic of investor discussions. Many say they will accept the VND130-150,000 range, while analysts argue the IPO will be a game for big players, ready to pay VND200,000/share or higher.

According to Hoang Xuan Quyen, Director of the Investment Analysis Division under Tan Viet Securities Company, he will be able to accurately forecast Vietcombank’s share price in only a few days, after the list of registered investors has been completed. If the number of investors registered to buy shares is high, the price will be as well, and vice versa.

Contradicting predictions have been released since the national leading bank announced the initial share price at VND100,000, several days ago. Analysts say that no previous IPO has attracted such rapt investor attention.

Local newspaper VnExpress conducted a quick survey and found that most individual investors are willing to pay VND130-150,000 per share. Vu Manh Vinh, an investor on ACB trading floor said that thanks to a household name, high chartered capital and robust performance, a reasonable share price is VND140,000.

Mr Binh, an investor on Bao Viet trading floor, said that he knows an investor who has reserved VND3-5bil for the IPO and would accept between VND130-150,000/share.

Xuan Phong, General Director of T&M Finance, says individuals should not purchase shares because the IPO is targeting and will benefit domestic and foreign institutional investors most.

According to Mr Phong, individual investors who buy shares at VND130-150,000/share will pay for Vietcombank’s shares by selling other securities, which will create sharp falls on the market.

If an investor gets the right to buy 5,000 shares at VND150,000/share, that is VND750mil, a significant sum in this market, Mr Phong said.

Vietcombank has decided to sell 6.5% of total shares to the public, 30% of which will be sold to foreign investors. As the demand is high and the supply limited, Mr Phong believes foreign investment funds are willing to pay over VND200,000/share.

Mr Quyen from Tan Viet Securities Company also thinks institutional investors will be superior to individual investors, but does not believe foreign investment funds will pay over VND200,000/share. He thinks institutional investors are wise enough to make accurate and reasonable decisions.

Mr Quyen says most individual investors are speculators or short-term buyers and sellers, who aim to profit from items first listing on the bourse. Whereas, Vietcombank will only list after the time it takes to negotiate with strategic shareholders, which could be awhile.

Ngo Van Minh, Deputy Head of the Brokerage Division under VPBS Securities Company, agreed that Vietcombank shares will not be attractive in the eyes of short term investors, contrary to long term investors to whom this is a strong, seasoned investment choice. Long-termers invest 30% of their money on prospective items and the other 70% on perdurable shares. Mr Minh said that Vietcombank is a good choice for long term investors, because of its reputation, experience and market niche.

Vietcombank’s representative, at the roadshow on December 11, acknowledged that Vietcombank’s IPO might not be as successful as expected. Nguyen Phuoc Thanh, General Director of Vietcombank, said investors are in need of money, and he doesn’t expect they will sell other shares to buy Vietcombank’s at higher prices.


source: http://english.vietnamnet.vn