Jun 04, 2018 / 15:59

GIC-backed Techcombank shares nosedive in trading debut

Hanoi-based Techcombank made a debut on the Ho Chi Minh City Stock Exchange (HoSE) with shares traded at VND102,400 (US$4.49) on June 4 at the close, down 20% from their reference price of VND128,000 ($5.62) apiece.

The lender's market capitalization, thus, dropped by nearly VND30 trillion ($1.3 billion) to VND119.4 trillion (US$5.22 billion) compared to the expected US$6.5 billion. 
Illustration photo.
Illustration photo.
At reference price of VND128,000 (US$5.62) per share, the lender would become the second-largest bank in term of market capitalization behind Vietcombank at VND192 trillion (US$8.4 billion), but was 2.5 times higher than that of Vietcombank at its respective IPO. 
During the trading session, selling pressure amounted and up to 281,000 shares were traded. Share prices are allowed to move 20% higher or lower around the benchmark price on the first day of listing, according to exchange trading rules. 
Before its debut today, a number of analysts and market participants said its share valuation was too high.
Established in 1993, Techcombank is one of the largest private sector joint stock commercial banks in Vietnam in terms of total operating income and pre-tax profit as of 2017, and one of the most profitable banks in Asia, stated the Vietnamese lender. Moody's also gave Techcombank one of the highest ratings among Vietnamese privately-run joint stock banks.
The 25-year-old bank provides a broad range of banking products and services to more than 5.4 million customers in Vietnam with an extensive network of 315 branches across the country.
Techcombank currently has a major shareholder in Masan Group, holding 14.99% stakes, while foreign investors own 22.5% of the bank's chartered capital, albeit each owns less than 5% before the listing. Dragon Capital, Capital Group, Clermont Group, Singaporean wealth fund GIC and Fidelity are among shareaholders of the bank.
In 2017, Techcombank achieved total operating income of VND16.1 trillion (US$708 million) and a profit before tax of VND8.5 trillion (US$373 million), according to the bank's financial statement. The bank posted return on average equity (ROE) of 28.0% and return on average assets (ROA) of 2.7% in 2017, positioning itself among the most profitable lenders in the Southeast Asian country.