The government plans to strengthen SOE restructuring and privatisation this year. As a result, many of SOEs would hold their initial public offering (IPO) in 2014 and the first half of 2015.
Speaking at the recent meeting to review the past year of the Ministry of Transport, Prime Minister Nguyen Tan Dung, requested that SOEs must be privatised and listed on the stock market. They would also be required to withdraw their investments from non-core businesses and reorganise their management apparatus, especially at marine, shipbuilding and aviation companies.
The minister of transport, Dinh La Thang, pledged that they would mostly complete SOE restructuring and that 11 state-owned corporations would be privatised in 2014. Companies subjected to the privatisation include several Civil Engineering Construction Corporations, Thang Long Construction Corp., Vietnam Waterway Construction Corporation (Vinawaco), Vietnam Motors Industry Corporation (Vinamotor) and the national flagship carrier Vietnam Airlines.
Vietnam Airlines shares to be the most attractive to investors
Of those companies, Vietnam Airlines has drawn the most attention by domestic and foreign investors, followed by Vinamotor, which is currently urged by the Ministry of Transport to to offer an early IPO this year.
Statistics have showed that Vietnam Airlines made combined revenues of VND72.555 trillion (USD3.43 billion) in 2013.. It earned a pre-tax profits of VND533 billion (USD25.21 million) during the year, up 34% compared to its plan.
Last year, Vietnam Airlines carried around 15 million passengers, up 8.5% on year.
In early 2014, the PM has just approved a privatisation plan for Hanoi Construction Corporation (Hancorp) which has a registered capital of VND1.9 trillion (USD89.89 million). It would hold an IPO in 2014 by auctioning over 49.74 million shares, accounting for 26.18% of its total registered capital.
The Vietnam National Textile and Garment Group (Vinatex) plans to go public for the first time in the first quarter of 2014. Meanwhile, Viglacera Corp plans to organise an IPO on February 20 at the Hanoi Stock Exchange (HNX) so as to offer to sell over 76.94 million shares, representing 25.07% of its registered capital, at a starting prices of VND10,300 per share.
One day later, over seven million shares by Bach Dang Construction Corp. would be offered for sale for the first time at HNX. Irrigation Construction Corp No.4 would hold an IPO on February 19.
Several other SOEs would also be listed on the stock market during 2014 including the State Capital Investment Corporation (SCIC) and the Bank for Investment and Development of Vietnam (BIDV).
An anonymous expert said despite the large amount of shares to be offered in the stock market, there’s a few worries about the Vietnamese stock market in 2014 as its capital is still modest compared to the national GDP. Private investors would be capable to buy all attractive shares.
By the end of last year, over 700 enterprises had been listed on the Vietnamese stock market. However, the market capitalisation was still the lowest in the Asian region due the large number of small-sized and low quality stocks and the lack of transparency of information about companies that hold IPO.
