Lender strikes out on IPO route

Market analysts are quietly confident about MHB’s prospects in the bank’s upcoming initial public offering

Mekong Housing Bank (MHB) has planned to sell 31.9 per cent of its VND4.512 trillion ($218.1 million) chartered capital on July 20 at a starting price of VND11,000 ($0.53)  per share approved by the central bank last week.

This will include 64.5 million shares, or 14.3 per cent of the total shares put for the initial public offering (IPO), auctioned for public investors. Strategic foreign partners can bid for 15 per cent of the offered shares and the bank’s labour union can buy 2 per cent. About 0.56 per cent will go to the bank’s staff with a discount rate.

The majority 68.1 per cent stake will remain under the state’s control.

“I think the IPO’s primary target would be institutional investors because with the current gloomy market conditions, it is difficult to attract individual investors’ attention,” said Dao Viet Truong, chief analyst of Hanoi Securities Corporation (HSSC).

A Tan Viet Securities Incorporation (TVSI) analyst said MHB shares could attract long-term investors who expected the bank’s strong growth in the future.

The analyst added the set starting price was reasonable enough to help ensure the successful IPO given the current ailing stock market conditions.

However, he anticipated the highest bid prices would “likely be VND12,000-13,000”.

Vietnam has equitised two among five state-owned commercial banks, including Vietcombank and Vietinbank. Both are already listed on the Ho Chi Minh Stock Exchange.

BIDV, the country’s third largest state-owned commercial bank in term of total assets, is also locked into its long-awaited initial public offering which is scheduled for the forth quarter of this year.

Agribank became a one-member limited liability company last year and there are no plans for its equitisation yet.