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Analysts recommend MBB shares
Making its debut on the HCM City Stock Exchange this past Monday, Military Bank (MBB) went from being king of the over-the-counter market to the most noteworthy new share on the stock exchange.
After one day of trading, MBB became the market's 11th leading share by capitalisation, representing 2.13 per cent of total market value. (The market leader, food processor Masan Group (MSN), accounts for 13.6 per cent.) After moving into positive territory on its first day of trading, MBB bottomed out yesterday at VND13,200 per share, although its trading volume surged over other codes on the board.
Nevertheless, many analysts see the share as a good investment choice.
"With cautious consideration, we value MBB at VND16,833 per share, 22 per cent higher than the reference price," said ACB Securities Company analyst Nguyen Thi Lan Huong in giving a buy recommendation on this stock.
"It's even more attractive since the 10-per-cent ceiling on foreign investment is still far away," Huong said, noting that, prior to listing, the bank had no foreign shareholders.
"Finding a foreign partners is in our strategy to develop in both domestic and foreign markets, but no foreign organisations have met our criteria so far," said Military Bank chairman Le Van Be.
The bank had set aside a 20-per-cent stake for a foreign strategic partner in addition to the statutory 10 per cent which other foreign investors would be allowed to hold, he said.
The risk of investing in MBB was its rising bad debt ratio, said Maritime Bank Securities Company analyst Tran Quoc Hoan. However, he said, that was a common trend throughout the banking industry.
"Regarding the strengths of the bank in fund management, risk management and good liquidity, I believe MBB is a good investment choice among listed banking stocks," said Vietcombank Securities Company analyst Quach Thuy Linh.
MBB plans to increase its charter capital from VND7.3 trillion (US$374 million) to VND10 trillion ($476 million) this year, with the increase to come primarily from one of its leading shareholders, military-owned telecommunications giant Viettel.
Viettel currently holds a 10-per-cent stake in the bank, following by Vietcombank (VCB) with 11 per cent, but the additional investment by Viettel would move it into the position as the bank's top shareholder.
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