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Untimely Sabeco auction blamed for sluggish market
The slugging stock market yesterday was blamed on the poor auction of a leading beverage producer Sabeco.
About 78 million shares were bought by 2,439 investors during the auction at an average winning price of VND70,300, accounting for just 61 per cent of the total shares on offer.
According to many securities analysts, this reluctance stems from an imbalance between trading volume and capital in the stock market.
"With the imbalance, trading on the stock exchange becomes more difficult. Investors of course don’t have much money to pour into this auction," said Nguyen Ngoc Truong Chinh, an analyst from Dong Duong Securities.
He said that investors were fed up with big auctions such as Sabeco’s which lately had not been generating as much profit as larger auctions used to.
Quang Vinh, an analyst from Thu Do Securities, said that the crisis in the global securities market limited overseas capital flowing to local exchange. No matter how attractive the auction was, it could not generate as much money as expected.
Price set too high
According to Gia Quyen Securities’ analysis, Sabeco’s IPO could not have been further delayed, but the corporation should have considered a more suitable price for the current situation.
"VND70,000 as an offering price seems so high as the shares fluctuate with the seasons, gaining profit while in season," said Dinh Duc Thien, deputy head of the Analysis Department of Gia Quyen Securities.
However, Catherine White from Thien Viet Securities said that investing in seasonal stocks required patience and that Sabeco, which has a good reputation, was worth investing in.
"If you are a long term investor, you should invest in Sabeco, as it is a good long term investment, thanks to solid business results and detailed future plans," White added.
With the limited domestic sales, the company plans to sell the remaining shares to foreign strategic investors working in the beverage supply market.
Sabeco has a charter capital of VND6.4 trillion (US$40 billion). It accounts for 50 per cent of beverage supply in the local market.
VNS
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