Market shifts remain sticky topic for banks

December 27, 2023 | 09:31
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Several Vietnamese banks, amidst efforts to enhance market presence, are still far off from going public or transitioning their listings to major exchanges.

Despite announcing a planned shift to a new bourse in August, to be executed in early Q4, there has been no further progress reported by Nam A Bank. At its AGM in April, it reaffirmed plans to list all circulating shares on either the Hanoi Stock Exchange (HNX) or the Ho Chi Minh Stock Exchange (HSX), depending on market conditions.

Market shifts remain sticky topic for banks
Some banks have seen decent growth in terms of shares from the start of 2023

The plan was initially approved in 2022 but was postponed to safeguard shareholder interests amidst an unpredictable macroeconomic climate and volatile stock market.

By May this year, the HSX had received Nam A Bank’s listing application for 846.4 million shares, with SBS Securities playing an advisory role in the listing process.

While Nam A Bank’s listing remains pending, its shares have shown remarkable growth, more than doubling in value since the start of the year, currently priced around 61 US cents per share.

This contrasts with other banks that, despite early year plans to change trading floors, have not yet initiated the process nor submitted listing applications. Furthermore, their share prices have fluctuated unfavourably.

VietBank in April decided to relaunch a programme aiming to list its shares on the HSX once legal and stronger market conditions were met. “For VietBank, the move is pivotal, enhancing transparency and competitive capability as a public company, and aligning with its strategic goals for 2023-2025,” a bank representative confirmed.

However, VietBank’s share price has not been encouraging this year, being one of the three bank stocks trading below face value, closing at around 40 US cents per share on December 20, with low trading volume.

Similarly, ABBank delayed its listing on the HSX in 2022. Despite intentions set since 2018, its plan remains unrealised. ABBank, along with VietBank, is trading below face value, hovering around 34 US cents per share.

In the same vein, BVBank is also gearing up for a pivotal move to list its shares on the HSX within 2023. Trading on the Unlisted Public Company Market (UPCoM) platform since July 2020, the bank is now seeking to elevate its market presence through the transition.

CEO Ngo Quang Trung said in May, “Listing on the HSX represents a strategic leap for BVBank. It will not only enhance our market standing and brand visibility, but also significantly improve the liquidity of our shares.”

However, like others, BVBank’s listing plans in 2023 have been postponed, with its shares currently priced around 44 US cents per share, up over 20 per cent from the start of the year.

Likewise, despite its announcement a few years ago, state-owned lender Agribank has not yet achieved a successful public listing.

According to the State Securities Commission, at present, Vietnam’s banking landscape is represented by 17 banks on the HSX, two on the HNX, and eight on the UPCoM. Recent years have seen a trend where banks listed on the UPCoM express intentions to shift to the HSX or the HNX. Yet, as 2023 comes to its end, none have successfully made the transition.

According to Deloitte, the Vietnamese market saw only three initial public offering (IPO) listings this year, raising about $7 million. The low number is attributed to tightened IPO and listing approval processes, combined with a high net outflow of foreign investment due to global and local factors impacting market liquidity.

The challenging conditions, along with the VN-Index’s decline since mid-2022, have compelled companies aspiring for IPOs to postpone their plans, awaiting more favourable times.

Bui Van Trinh, partner of Audit and Assurance at Deloitte Vietnam, noted, “While Vietnam’s stock indices have shown signs of recovery as 2023 draws to a close, they still lag significantly behind the peak levels seen in 2021 as well as early 2022. Nonetheless, the government’s various economic stimulus efforts and steps to enhance the Vietnamese stock market are poised to bolster investor confidence heading into 2024.”

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By Celine Luu

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