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Standard Chartered share sales in ACB to have little impact
Asia Commercial Bank’s foreign strategic partner, Standard Chartered Bank (Hong Kong) Ltd, will start selling 1.15 million ACB shares on Monday, according to the Ha Noi Stock Exchange.
The one-month sell-off has been required by the State Bank of Viet Nam in order to maintain the foreign partner’s holdings in the domestic bank at 38.5 million shares, or 6.09 per cent of ACB’s charter capital.
The ACB planned to convert 1.34 million convertible bonds to shares on September 10, with one convertible bond worth 100 shares with a face value of VND10,000 of each.
ACB shares yesterday, however, closed unchanged at VND47,300 apiece.
The five-year bonds were issued in February 2008 with a fixed coupon of 8 per cent a year. The bank, in corporation with ACB Securities Co, will finalise the list of shareholders for bond convertion on September 9.
"The sale from a representative of Standard Chartered Bank will have no impact on the ACB price as the selling stake is quite small," said Nguyen Duy Tan, a broker for a Ha Noi securities company.
But the bond conversion could influence ACB share price in some ways, Tan said, pointing to an increasing supply of ACB shares on the market if there is a move to sell the shares for profit after the conversion.
"But long-term investors can take advantage of the profit-taking to buy shares at a good price," he added. Huynh Tuan Khanh from Viet Dragon Securities Co said in a recent report that ACB share had promising growth potential, with a price-to-earnings (P/E) ratio at 14x, a much lower level than the average P/E ratio in the banking sector.
Khanh recommended investors consider ACB shares at the present time, keeping an eye in the later months of the year on the bank’s credit risks due to increasing bad debt and high credit growth.
In the first seven months of this year, the ACB reported assets of VND147.16 trillion (US$8.3 billion) and a profit of VND1.4 trillion ($78.65 million), not counting profits from subsidiaries but including funds allocated to the bank’s provisionary risk managment fund.
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