Immediately after the registration performance of Vietcombank’s IPO was announced, some registered investors have offered to sell their spots.

Vietcombank IPO – great expectations becomes modest inference

 

 

By the afternoon of December 18, investors had reportedly registered to buy 110mil Vietcombank shares, just 10% higher than the 97.5mil shares offered and far below expectations.

 

Bui Ngoc Long, Marketing Director under IRS Securities Companies, said that on the morning of December 19, some investors offered to sell their right to join the IPO for VND1,000/option.

 

Other sources say that price then went up that afternoon to VND7-9,000/option.

 

Investors have been informed that the registered volume is not much higher than the offered volume and may think that the final share price will not be high; as such, short-term investors are trying to sell their rights to join Vietcombank’s IPO to earn the quick profits they cannot expect from such a low turnout. No successful sale has been reported so far.

 

A source from the HCM City Stock Exchange said 7,000 investors have registered to buy 11mil shares. Foreign investors have registered to buy nearly 34mil shares, only slightly higher than the 29.5mil allocated to them. The source said there are few registered individuals, most are institutional investors.

 

The modest pre-IPO interest is somewhat discouraging to some. Hoang Xuan Quyen, Head of the Analysis Division under the Tan Viet Securities Company, said the final price of Vietcombank shares may hover around the starting price - VND100,000/share.

 

Mr Quyen said that due to meeker interest than expected, investors’ opportunity to successfully buy shares is very high, around 90%. Meaning investors will be wise enough to not make offers too far over the VND100,000/share level.

 

Mr Quyen said that the highest price investors will be willing to pay is VND110,000/share.

 

Tran Tien Dung, an investor on the HBBS trading floor, said the final share price will be around VND101-102,000/share.

 

Vietcombank’s shares are more appropriate for long-term investors, while most Vietnamese investors are not. No one can accurately predict how Vietcombank shares will perform after the IPO, because prices rely on the market.

 

“If investors want to inject funds in the banking sector, they five other joint stock banks IPOs to look forward to before the end of 2008’s first quarter,” said Mr Dung.

 

Manh Tuan, an investor on the ACBS trading floor, said many have decided not to join Vietcombank’s IPO but will instead buy the rights to purchase Vietcombank shares at lower prices from employees, who have the option of shares at preferential prices.

 

Vietcombank has announced that 52.5mil shares will be made available to staff.

 

Sources from HOSE said the final number of registered investors and shares will be released on December 21; the information will be made available on its website.

Source VNN

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