|
VietinBank confident with IPO despite fiscal crisis
The initial public offerings (IPO) of VietinBank is drawing much attention from investors as one of the largest State-owned banks. Dau Tu Chung Khoan (Investment Review ) yesterday held a Q&A on the offering to provide readers with detailed information of this auction.
The bank’s chairman Pham Huy Hung, alongside with a representative from the bank’s consultant Saigon Securities Inc, and some economists hosted this Q&A.
Why did the bank decide to do an IPO during this time of market turmoil? Do you think this offering will be successful?
Pham Huy Hung: We spent four years preparing this IPO, aiming to enhance our management and administration,and to improve our competitiveness in global integration.
The market is now struggling with the global crisis, but we believe that our IPO will succeed as the banking shares are still proving attractive for investors.
We also have faith in our success because our price is appealing.
I am wondering about how you came up with the offered price of VietinBank shares at VND20,000 (US$1.17) for this IPO?
Le Le Hang: We worked with JPMorgan – another of VietinBank’s consultants in this auction – to come up with the price. The price was also approved by the Government and related organisations.
We think that this price reflects the bank’s actual value. As well, JPMorgan regarded it as a reflection of the bank’s potential.
Pham Huy Hung: This price was set based on our real value and the market price of other shares of commercial banks and financial institutions traded in the stock market.
Actually, VND20,000 is just the offering price. The real price of our shares will be decided by the market through this auction.
Do you think this price is too high, compared with the prices of other banking shares in the market?
Pham Huy Hung: When we appraised State capital in the bank, the capital was worth VND16 trillion ($1billion). The Government approved us to set a book value of more than VND10 trillion ($588 million).
Actually, this price is just two times higher than its book value, which seems profitable for investors now.
Cao Cu Boi: In my own opinion, VND20,000 for a banking share is cheap, especially cheap based on our calculations. It’s even cheap compared with the current price of Asia Commercial Bank (ACB) and Sacombank (STB).
In case the share price falls 30 to 50 per cent after the offering, does the bank have any plan to support shareholders, such as with a repurchase?
Pham Huy Hung: We pledged to stand behind our shareholders to overcome the hard economic times. Our shareholders can be assured to have reserved benefits. About a possible buyback, we will implement anything in accordance with the Securities Law and our development strategy.
VNS
|
