Vietnam eases stance on foreigners eyeing Sacombank
HANOI - Foreigners who want to buy shares in Vietnam's first listed bank will be allowed to bid for as much as 5 percent without requesting permission from the central bank, a stock exchange official said on Wednesday.
Sacombank, with a market value of around $970 million, is set to make its stock debut on July 12, becoming the first bank in Vietnam to trade on the Ho Chi Minh City Securities Trading Center .
"The central bank has said foreign investors do not have to ask for permission when buying less than 5 percent into Sacombank," an exchange spokesman said, citing a central bank letter to Sacombank.
At present, foreigners wishing to buy shares of any Vietnamese bank must obtain central bank approval in advance, a lengthy process which would slow foreign indirect investment in Vietnam's capital market.
The debut next week of Sacombank, whose full name is Saigon Thuong Tin Commercial Bank, has long been expected to give the capital market in Vietnam new momentum, but foreign investors have a slim chance to buy into it.
Sacombank set the share's starting price at 81,000 dong ($5.1), saying it was the average from trade on communist-run Vietnam's unofficial markets in April before the bank listing.
The shares were last seen on offer for sale on the unofficial markets in mid-June at 82,000 dong ($5.14) each, with a volume of 10,000 shares, brokers said. The bank was valued at $971 million, based on its total shares of around 189 million.
The central bank told Sacombank that foreigners can only own a total of 30 percent in the bank, similar to the curb on an unlisted bank, while Vietnam allows foreign investors to hold a combined 49 percent in a listed company, the spokesman said.
Sacombank's prospectus said that as of April 15, the World Bank's International Finance Corp., British fund manager Dragon Capital and ANZ Bank held a combined 26.3 percent stake in the bank, leaving 3.7 percent for foreign investors.
The VN Index has risen more than 60 percent this year, closing at 499.8 points on Wednesday, after hitting its lifetime high of 632.69 points on April 25 as investors zoom in on Asia's second fastest-growing economy after China. ($1=15,955 dong)
By Ho Binh Minh - Reuters - July 5, 2006
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