Vietnam's Sacombank wins stock listing approval
HANOI - Semi-private Saigon Thuong Tin Commercial Bank (Sacombank) said it won permission to become the first local bank to list on the Vietnam stock exchange, a move that would boost the market's value by 50 percent.
Vietnam's stock market capitalisation, now at around 31.5 trillion dong ($1.98 billion), would jump to $2.98 billion with the listing of Sacombank, the country's second-largest by assets among more than 30 partly private banks.
The Ho Chi Minh City exchange, where an investment firm became the 36th stock to trade on Thursday, has been the best performing market in Asia so far this year as investors look for ways to cash in on Vietnam's strong economic growth.
"We plan the stock debut in late June or early July," Dang Van Thanh, chairman of the Ho Chi Minh City-based Sacombank, told Reuters on Thursday. A company licensed to list in Vietnam has three months from the licensing date to come aboard.
The bank's market value has nearly doubled to $950 million from $500 million in early April. Its shares in the unofficial market rose to around 80,000 dong ($5) each last week from $4 in April on prospects of listing on the Ho Chi Minh City exchange.
The State Securities Commission, the market watchdog, said Sacombank will issue more than 30 million shares immediately after its debut, 20 million of which will be sold to the public via an auction on the Ho Chi Minh City stock market.
The remaining 10 million shares will be sold to the bank's strategic partners, the commission said in a statement.
The World Bank's International Finance Corp., British fund manager Dragon Capital and Australia and New Zealand Banking Group Ltd. each has 10 percent in Sacombank, which says it has 38 branches in Vietnam.
Foreign ownership ceiling
Vietnam allows foreign investors to hold a maximum 49 percent in a listed firm, but it has yet to finalise regulations on foreign ownership in a listed bank.
"At the moment, the rule on the foreign ownership in a credit institution is still in place and that is 30 percent," Thanh said. Therefore, no more foreign investors would be able to buy Sacombank shares after its listing debut.
Sacombank's assets jumped nearly 40 percent last year to $910 million.
Vietnam's largest listed firm is Vietnam Dairy Products Co. (Vinamilk) , with a market value of $893 million.
On Tuesday, Finance Minister Nguyen Sinh Hung told Reuters that Vietnam this year plans to double the number of companies listed on the exchange while also doubling the market value.
Commercial banks in Vietnam are working to improve their competitiveness in anticipation of the Southeast Asian country joining the World Trade Organisation later this year.
They plan to list, form alliances with major domestic firms or sell stakes to foreign banks to raise funds in an effort to keep up with Vietnam's economy, which the ruling Communist Party expects will grow 7.5-8 percent per year until 2010.
Vietnam's economic growth was 8.4 percent last year, the fastest in Southeast Asia.
Thursday's debutant, Ho Chi Minh City Infrastructure Investment Co., closed at 50,000 dong ($3.1) each, with 275,600 shares changing hands.
The VN Index ended 1.64 percent down at 566.11 on thin trading volume following the all-time high of 632.69 set on April 25. ($1=15,927 dong)
Reuters - May 18, 2006.
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