SCIC’s divestment boosts share prices, market soars hinh anh 1Inside SCIC’s office in Hanoi. (Photo: VNA)

Hanoi (VNA) - The State Capital Investment Corporation (SCIC) has confirmed it will continue its scheduled competitive share offerings in four companies in the latter half of this month.

The move aims to ease investor concerns over the possibility of a delay after the corporation was yet to disclose the initial bidding prices for these companies as scheduled.

In November, the Government’s investment arm announced a series of State capital divestments from five listed companies, including Vietnam Construction and Import-Export Joint Stock Corporation (Vinaconex), Tien Phong Plastics Joint Stock Company (NTP), Binh Minh Plastic Joint Stock Company (BMP), Domesco Medical Import - Export Joint-Stock Corporation (DMC) and FPT Corporation (FPT).

By the end of last month, SCIC had only announced the initial selling price for Vinaconex (stock code VCG), which was set at 25,600 VND (1.12 USD) per share, and had yet to announce bidding prices for four other companies as scheduled between November 27 and December 1.

SCIC will continue working on share offerings for these four shares, as stated at the November 17 roadshow, with no imminent disruption, a representative from SCIC told Vietnam News by telephone, explaining it is awaiting information of companies for price announcement.

SCIC will auction 96.24 million shares of Vinaconex, equal to a 21.79 percent stake of the company, on December 8 on the Hanoi Stock Exchange. In the latter half of this month, it will continue offloading 37.1 percent of capital at Tien Phong Plastic, 29.51 percent at Binh Minh Plastic, 34.71 percent at Domesco Medical and 5.96 percent at FPT Corp.

Share prices of these four companies quickly attracted investors’ attention and sharply increased in value following the divestment announcement.

BMP’s share price has increased 30 per cent in the past one month, from 73,000 VND per share to 95,000 VND (4.2 USD) on November 30. FPT’s share price was up 16 percent to 58,400 VND (2.2 to 2.59 USD); DMC up 27 percent from 104,000 VND to 132,000 VND and NTP up 17 percent from 72,800 VND to 85,000 VND.

This is not the first instance of the SCIC’s share offering taking a positive turn on a company’s market value.

After the SCIC’s auction of 48.4 million shares of Vinamilk on November 10, 2017, Vinamilk’s shares (VNM) increased its value from 151,000 VND per share to 173,800 VND (6.7 to 7.75 USD) with more than nine million shares being traded on the stock exchange on that day.

VNM price closed December 4 at 203,000 VND per share, a monthly increase of 31 percent.

Following the success at Vinamilk, on November 29, the Ministry of Industry and Trade announced an offering of 343.7 million shares for the State-owned Saigon Beer Alcohole Beverage Joint Stock Company (Sabeco), equivalent to 53.59 percent of its charter capital at initial selling price of 320,000 VND (14.2 USD) per share.  

After the divestment plan is announced, SAB shares rose sharply, from 190,000 VND to 339,000 VND per share (8.45 to 15 USD), becoming the most highly priced stock on the market at present.  

If the offering of Sabeco’s shares is successful, the MoIT will collect at least 109.9 trillion VND (4.8 billion USD).  

SCIC has made significant progress in its divestment, as it is interested in the bidding process to increase transparency, rather than just selling a majority stake to strategic investors, as before.

The SCIC wants to promote the competitive bidding process to enhance transparency in the divestment process, so that listed companies can be exempt from making a public bid, instead of being obliged to send a written letter of interest of purchase to the auction board seven days before any auction.

In addition, SCIC is considering asking for the Government’s approval to sell a majority of shares from its divesting companies for a better price than the market’s expectation.-VNA