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PVFC optimistic about initial public offering
After months of speculation, executives were largely upbeat on October 22 about the results of PetroVietnam Finance Corp (PVFC)’s initial public offering.
The 59.6 million shares were sold on October 19 for 69,974 VND a piece, up from the 51,000 reference price set prior to the auction. PVFC raised 4.1 trillion VND (260.8 million USD) from the sale.
The Ha Noi Securities Trading Centre (HASTC) reported the official results on October 22.
“We are satisfied with the sale as it meets criteria set in our equitisation plan,” said a PVFC representative, who requested anonymity.
“We sold all our shares, which proves the stock is attractive to investors and promises a bright future when it is eventually listed on the exchange.”
The company plans to officially list toward the end of 2008 or early 2009, while for the time being the shares are being traded on the over-the-counter market.
During the auction, 43 institutional and 4,279 retail investors were awarded shares. Four foreign investors bought 529,200 shares.
In terms of volume, the PVFC auction was the single largest sale in the bourse’s history, said Dao Hong Hoa, a member of HASTC’s Analysis Department.
“The results, though, did not match the scale of the company,” said Hoa.
PVFC is the first financial firm to sell shares on the exchange and is a major corporation that has the backing of PetroVietnam, the country’s leading oil producer. There were expectations the shares would sell for much higher.
Hoa explained, though, several factors worked against the company. It was not the first IPO of the year, nor will it be the last. PVFC has to compete with a number of other big auctions like Vietcombank, the country’s leading bank that plans to sell shares in the coming month.
Second, investors remain cautious about initial public offerings, especially in larger corporations. Earlier this year, a number of investors bought shares at extraordinarily high prices during several auctions, only to see stocks plummet when they officially listed.
“As a result, 69,974 VND is regarded as okay for PVFC,” said Hoa.
A representative from Morgan Stanley, which has entered talks to become a PVFC strategic partner, said PetroVietnam Finance remains an attractive long-term buy given the company’s financial earnings and potential.
“When you have good business results, investors will find you. You don’t have to advertise,” said the representative.
“When it lists, PVFC will become a blue chip and a good defensive stock for investors,” said Dao Van Khanh, an Agribank Securities analyst.
PVFC shares began trading on the over the counter market on October 22 for more than 75,000 VND a share.
VNA
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