Investment
Vietnam’s stock market up in investors’ eyes
Vietnamese stocks have taken off in November -- with the benchmark VN Index rising almost 10 percent -- as foreign investors rushed to expand their footprints in the fast-expanding Southeast Asian economy.
Mall operator Vincom Retail JSC has surged 26 percent since its exchange debut on November after strong demand for its share sale resulted in the offer pricing at the top of the range. The market then got another boost when Hong Kong conglomerate Jardine Matheson Holdings Ltd. last week increased its stake in Vietnam Dairy Products JSC, the country’s biggest company that’s known as Vinamilk, to 10 percent and said it was keen to buy more.
Last month, State Capital Investment Corporation (SCIC) announced the sale of a 3.33% stake in Vinamilk, with the aim of raising more than $280 million for state budget. SCIC currently owns 39% of the dairy. As such, after the move, SCIC’ total shares at Vinamilk will be around 36%. UBS AG Singapore and Saigon Securities are advising on the sale.
In addition to Vinamilk, the government has put up effort in divesting from the country's other valuable companies, including two biggest local brewers in Vietnam Saigon Alcohol Beer Beverage JSC (Sabeco) and Hanoi Alcohol Beer Beverage JSC (Habeco).
With regard to Vincom Retail JSC, the company listed 1.9 billion shares on November 6 on the Ho Chi Minh City Stock Exchange, taking another a step toward its ambitious plans for nationwide expansion. This is also the first shopping mall operators in Vietnam listing shares on the stock exchange. The listing followed an initial public offering (IPO) last month that raised a record $709 million through private placements. This is the country’s largest IPO in a decade, trailing only the 2007 share sale from Bank for Foreign Trade of Vietnam JSC when it was chosen for a government pilot program for privatization in the banking sector. The last first-time share sale that topped $100 million came from local airline VietJet Aviation JSC, whose shares are up 48 percent since they started trading in February.
“The success of the Vincom Retail share sale recently and also the purchase of a 10 percent stake in Vinamilk by Jardine has kind of electrified sentiment,” said Fiachra Mac Cana, managing director and head of the institutional client division at Ho Chi Minh City Securities JSC, the nation’s second-largest brokerage. The fact that foreigners are “willing to pay a significant premium to current valuations” is leading to a “re-rating” of the market, he said.
Vincom Retail was founded in 2012 to develop modern retail channels and operations, becoming a private company a year later. After starting out with three malls, it now has three subsidiaries and 41 malls operating on four platforms: Vincom Center, Vincom Mega Mall, Vincom+ and Vincom Plaza. The company plans to have 200 malls by 2021.
The VN Index closed up 1.6 percent on Tuesday in Hanoi, with the measure on course for its best month since January 2014.
The VN Index closed up 1.6 percent on Tuesday in Hanoi, with the measure on course for its best month since January 2014.
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In addition to Vinamilk, the government has put up effort in divesting from the country's other valuable companies, including two biggest local brewers in Vietnam Saigon Alcohol Beer Beverage JSC (Sabeco) and Hanoi Alcohol Beer Beverage JSC (Habeco).
Mall operator Vincom Retail JSC has surged 26 percent since its exchange debut on November.
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“The success of the Vincom Retail share sale recently and also the purchase of a 10 percent stake in Vinamilk by Jardine has kind of electrified sentiment,” said Fiachra Mac Cana, managing director and head of the institutional client division at Ho Chi Minh City Securities JSC, the nation’s second-largest brokerage. The fact that foreigners are “willing to pay a significant premium to current valuations” is leading to a “re-rating” of the market, he said.
Vincom Retail was founded in 2012 to develop modern retail channels and operations, becoming a private company a year later. After starting out with three malls, it now has three subsidiaries and 41 malls operating on four platforms: Vincom Center, Vincom Mega Mall, Vincom+ and Vincom Plaza. The company plans to have 200 malls by 2021.
The VN Index closed up 1.6 percent on Tuesday in Hanoi, with the measure on course for its best month since January 2014.
