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How attractive will Vietinbank’s shares be?
The information that the starting price of Vietinbank’s shares at the IPO slated for December 25 will be VND20,000 only has drawn the attention of investors. However, it remains unclear how many investors will be interested enough to attend.
Individual investors unmoved
One surprise is that the announced low starting price level of just VND20,000 per share for such a famous bank like Vietinbank has not attracted individual investors. A quick survey has revealed that investors have a lot of other investment opportunities at present.
“Stocks at low prices are aplenty on trading floors; there is no need to bury capital in Vietinbank shares,” Hung, an investor on Thang Long securities company’s trading floor, said. Hung said Military Bank shares are now trading at VND14-15,000/share, and that this is a high-liquidity share item.
On the listed bourse, Sacombank shares (STB) have been sliding in price to less than VND19,000/share now, while ACB has been hovering around VND29,000/share, and VCB (Vietcombank) shares VND30-32,000/share.
“These are familiar share items, about which investors have a lot of information, thus are transacted easily,” Hung said. “Investors will not be ready to inject huge amounts of capital in Vietinbank’s IPO and then wait months for it to fulfill procedures.”
In fact, analysts have been trying to persuade investors that VND20,000/share is a reasonable price, and the dividend of 12% per annum is attractive. However, individual investors don’t seem to concur.
In general, individual investors are ‘surfing investors’ – they aim to earn money from short-term investment deals, they don’t target dividends.
Opportunities for institutional investors?
The starting price is really a low level if compared to the price level set for Vietcombank’s IPO. Sources say that the suggested starting price for Vietinbank was as high as VND100,000.
The director of a domestic investment fund, while declining to comment about the price level, said he was not sure the price of VND20,000/share would attract investors.
With the price of VND20,000/share, the IPO, if successful, would lure some VND1tril from the market. Institutional investors will think very thoroughly before injecting money in Vietinbank. Only institutions which believe they can mobilise capital will join the IPO, while it is very difficult to raise funds at this moment.
Moreover, Vietinbank’s shares may be less attractive to investors as it is uncertain what the bank intends to do with the capital earned from the IPO.
Meanwhile, according to the Vietnam Association of Financial Investors (VAFI), some foreign investment funds have expressed interest in Vietinbank’s IPO and have been trying to get more information about the bank.
Tien phong
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