The Dung Quat Refinery in Quang Ngai province (Photo: BSR Company) Hanoi (VNA) - The stock market will feature a series ofinitial public offerings (IPOs) by State-owned enterprises (SoEs), includingmega corporations, this year-end.
Analysts say this is likely to attract cash flows and is an opportunity forinvestors to measure business growth for future investments.
According to the VNDirect Securities Corporation, the expected fourth quarterIPOs include big names like the PetroVietnam Power Corporation (PV Power),PetroVietnam Oil Corporation (PV Oil), Binh Son Refining and PetrochemicalCompany Limited (BSR), Vietnam Rubber Industry Group (VRG), and VietnamSouthern Food Corporation Limited (Vinafood 2).
In particular, BSR, owner of the Dung Quat Refinery, plans an IPO on November7, 2017 with a reference price of 14,600 VND (0.65 USD) per share, putting up5-6 percent of total shares with the hope of selling a 49 percent stake to astrategic partner in 2018.
While a specific date has not been announced, PV Oil is also expected to holdan IPO in the last two months of 2017. The company hopes to sell 20 percent of itsshares at a starting price of 14,300 VND (0.636 USD) per share.
PV Oil has said it will sell 44.7 percent of its shares to strategic partnersand 0.2 percent of shares to employees to reduce the level of State ownershipfrom 100 percent to 35.1 percent.
Similarly, VRG’s IPO in the fourth quarter of 2017 would put on offer 13.14 percent of its shares at a reference price of 13,000 VND (0.57 USD) per share. Inorder to reduce the State ownership to below 51 percent, VRG will sell 11.9 percentof shares to strategic partners and 1.24 percent to employees.
[PV Oil to offer 20 pct stake in coming IPO: HSC]
PV Power also plans to sell 20 percent of its shares in December 2017, at an expectedstarting price of 14,329 VND (0.637 VND) per share, reducing State ownership tobelow 51 percent.
As per the companies’ financial reports at the end of 2016, BSR has a chartercapital of up to 35 trillion VND (1.5 billion USD), and is considered thelargest company, in terms of chartered capital, to be equitised at the moment.
The other SOEs also come with large amounts of chartered capital, like PV Oilat 10.8 trillion VND (480 million USD) and PV Power at 21.7 trillion VND (965million USD).
Over the past five years, IPOs by the Vietnam Airlines Corporation (ACV),Vietnam Textile and Garment Group (Vinatex), Vietnam Engine and AgriculturalMachinery Corporation (VEAM), or Vietnam Pharmaceutical Corporation(Vinapharm), have achieved very impressive results.
Therefore, the upcoming IPOs are expected to attract an even larger number ofinvestors.
Nonetheless, analysts also advise that investors make no hasty decisions intheir choices, and that they keep an eye on divestment in areas like aviation,transportation, beverages, construction materials and pharmaceuticals.
It is also likely that in the fourth quarter, the listed market will welcomemany large companies after the IPO. According to Bao Viet Securities Company(BVSC), the capitalisation of large companies often trigger high fluctuationsin prices, so the market will be more difficult to predict in the last twomonths of the year.
BVSC’s picks of potential stock groups for the year end are oil and gas;banking which continue to deal with non-performing loans; pharmaceuticals whichhas a positive medium-term outlook; Information Technology; and real estate. Italso advises investors to watch out for differences between enterprises in thesame sector. -VNA
VNA
