Finance-banking stocks to become new craze in 2018

December 28, 2017 | 14:35

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A recent survey conducted by Vietnam Report revealed that finance and banking stocks would be the ones to watch out for in 2018 as a number of reputable financial institutions (FIs) schedule to hold their initial public offering (IPO) next year.

In early 2018, Ho Chi Minh Development Bank (HDBank) planned to hold their IPO on the Ho Chi Minh City Stock Exchange (HoSE).

Nguyen Thi Phuong Thao, permanent vice chairwoman of the Board of Directors (BOD) of HDBank, asserted that the bank accomplished a steady annual average growth rate (AAGR) of 30 per cent over the past decade. She added that the bank expected to maintain the AARG at 25 per cent in 2017-2020.

Another bank to watch in 2018 is TPBank (ticker TPB) which scheduled to list on HoSE before the second quarter of 2018. Earlier, the bank’s shareholders approved the plan to raise the charter capital by the separate issuance of up to 87.6 million shares, said Do Minh Phu, TPBank’s chairman of the BOD.

Currently, the TPB stock on the over-the-counter market (OTC) is priced at VND26,000 ($1.1). Phu added that the bank expected to achieve a revenue of VND1.2 trillion ($52.96 million) in 2017.

Additionally, members of the BOD at Orient Commercial Bank (OCB) highlighted the bank’s intention of organising its IPO on HoSE in late 2018 or in early 2019. The estimated profit of OCB in 2017 mount up to VND1 trillion ($44.1 million), which exceeded the annual target by VND780 billion ($34.3 million).

OCB is the first Vietnam-based bank to successfully apply Basel II

The list of FIs expecting to list on HoSE goes on, including Vietnam International Bank (VIB) and Techcombank. Additionally, there are several other institutions planning to list shares on UPCoM, such as BacA Bank and VietBank.

The most recent survey conducted by Vietnam Report displayed finance-banking stocks' investment prospects. Specifically, over 45 per cent of respondents elected finance-banking as the stock group most worthy of investment and as the most profitable in 2018, following by real estate-construction with 29.2 per cent and consumption goods with 20.8 per cent.

Vo Tri Thanh, former deputy director of the Central Institute for Economic Management (CIEM), pointed out that bank stocks would most likely attract buyers and investors in 2018 due to more effective non-performing loan handling solutions as well as the upcoming application of Basel II to the entire banking system.