Vietnam Overseas

The Ho Chi Minh Stock Exchange’ benchmark VN-Index of 154 listed firms has slumped more than 44 percent this year, closing Friday at 515.88 points.

At least three of the IPOs planned in the first quarter failed because too few people registered to buy shares, the exchange announced.

Other firms shelved their IPO plans because no investors registered to participate in their share auctions.

State-owned Hanoi-Beer-Alcohol-Beverages Corporation, Vietnam’s second-largest company, raised only VND198.5 billion (US$12.3 million) from a share sale on March 27.

It had anticipated raising VND1.74 trillion ($108 million) but of the 34.8 million shares on offer, bids were only made for four million.

In January, the IPO of Saigon Beer-Alcohol-Beverages Corporation, the country’s largest brewer, met a similar fate, with only 61 percent of the 128.3 million shares sold.

Meanwhile, floats of other large firms, such as the Bank for Investment and Development of Vietnam, the Industrial and Commercial Bank of Vietnam, leading cell phone service provider MobiFone and the Bank for Housing Development of Mekong Delta, are expected to proceed later this year.

EuroCapital also said new shares shouldn’t be issued when the market was heading south.

Some analysts said in addition to the market’s nosedive, high minimum prices were also deterring investors.

The analysts suggested delaying upcoming IPOs to avoid an oversupply of shares from pushing the market lower.

But many experts said delays would hinder the development of the local companies.

“Investors will be eager to join IPOs if the minimum price is set at a reasonable level,” said Dr. Le Tham Duong from the HCMC Banking University.

“Companies should also reveal their post-IPO operating plans if they want to attract investors to participate in their float.”

EuroCapital Securities Company said the government should decide what was the preferred outcome of an IPO - improving the equitized firm’s efficiency or maximizing the amount raised through the float.

The brokerage suggested the government sell shares in state-owned firms to strategic partners first and carry out share auctions to the public later.

Reported by Mai Phuong

(28-04-2008)

HA NOI — Vietcombank’s shareholders voiced strong concerns about shrinking share prices in the bank’s first general shareholders meeting on Saturday, putting management on the hot seat to explain the bank’s shrinking assets during the first quarter of the year.

In last December’s initial public offering, the average winning price per share for Vietcombank stock was VND107,860. Four months later, the shares are trading on the over-the-counter market at about VND50,000 each, a loss of 54 per cent.

One shareholder said the winning price was too high because of the fixed initial offering price of VND100,000 per share.

Based on his calculations of capital, profit, P/E ratio and the real situation in the domestic stock market last December, he now figured a more realistic offer price should have been around VND20,000.

Vietcombank chairman Nguyen Hoa Binh, however, said the downtrend of the bank’s shares was in keeping with the overall trend on the stock market.

Many investors asserted that Vietcombank was harming the interests of shareholders by failing to reach agreement on suitable share prices with foreign strategic investors.

Vietcombank general director Nguyen Phuoc Thanh pointed to the difficulty in meeting the legal requirement set out in Decision No 109 that shares be sold to foreign strategic investors at a price higher than the winning bid in last year’s IPO.

However, he noted, if Vietcombank were unable to sell more shares to strategic foreign investors, it would be unable to finalise the equalisation process, putting the bank into a catch-22 situation.

As it stands, outside investors still only hold about 9 per cent of equity in the bank, while the State continues to own over 90 per cent.

Meanwhile, companies with less than 20 per cent sold to investors, are not allowed to list on the stock market, leaving Viet-combank shares in a sort of trading limbo on the over-the-counter market.

“I haven’t heard any specific plan to sell more shares or reduce losses to investors,” complained one shareholder.

Bank leaders said they could ask the Government to allow them to list on the stock market, as a special case.

Some individual shareholders were calling on Vietcombank to start buying back shares from large institutional investors to keep the share price from plunging deeper.

Others were calling for issues of bonus shares to existing shareholders at prices of around VND50,000 to help them minimise their losses.

A few shareholders also voiced anger over the fact that, of the capital reaped by Vietcombank through its IPO, it was only allowed to retain 30 per cent, with the remaining 70 per cent going into the State.

They felt that this operated to the detriment of shareholders and wanted to know how even the 30 per cent of capital gained from the IPO was being spent.

These and other questions were left unresolved at the conclusion of the meeting.

The meeting voted to elect a seven-member executive board and five-member supervisory board, which would be paid a total of 0.36 per cent of the bank’s net profits.

The shareholders also approved an annual dividend of 12.08 per cent for existing shareholders. — VNS

Mon Jan 28, 2008 9:13pm EST

HANOI, Jan 29, 2008 (Reuters) - The Vietnamese government has approved a plan by South Korean group POSCO (005490.KS: Quote, Profile, Research), the world’s third-largest steelmaker, to build a $4.5 billion steel mill with a local partner, a state newspaper reported on Tuesday.