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Vietnam stock is in red, are investors holding money for the big expected IPO?

Wednesday 02, 05 2018
Closing the session on 26/4, the Vietnam stock market was still in red. By the end of the session, VNIndex was more than 1,044.86 points, losing nearly 35.88 points. The HNX-Index lost 6.19 points, staying at 120.12 points.
Vietnam stock is in red, are investors holding money for the big expected IPO?

Vietnam stock market in April

From the beginning of the year, it can be seen that the Vietnam stock market in April is experiencing the lowest point in the last 2 years. A number of stocks declined significantly, especially banking stocks causing the sharp falls of other stocks.

Vietnam stock 1

Vietnam stock 4

Only three bluechip stocks such as: VNM, SAB, ROS rose but they were not strong enough to push market up. In addition, 40 million FRT shares of FPT Digital Retail JSC were officially traded on HOSE on 26/04/2018 with a reference price of 125,000 VND / share. This is a remarkable point in the market when FRT rose to the ceiling price of 150,000 dong per share in the initial public offering.

Vietnam stock 6

Experts predicted that keeping money for the expected big IPO in the future is the main reason for the downgrade of stock market this month.

What is expected from IPO of large SOEs in 2018?

GIC Pte - Singapore's sovereign wealth fund – plans to spend $850m corresponding to 7.1% stake in Vingroup and Vincom Retail (VRE), which currently holds the record for largest IPO in Vietnam.

What is expected from IPO of large SOEs in 2018?

Source: Bloomberg, VietnamCredit

However, GIC Pte will spend nearly $ 100 million to own shares of Techcombank (TCB) in June 2018. TCB is also targeting to earn about $ 922 million or VND21,000 billion from its initial public offering. This will be the largest revenue from IPO in Vietnam so far, exceeding the initial sale of VRE shares in October 2017.

Experts’ opinions

These potential IPOs may be the reason behind strong sell-offs on the Vietnamese stock market, as investors prepare for upcoming IPOs -  said Joshua Crabb, Asian stocks of Old Mutual Global Investors AP, said.

According to Fiachra Mac Cana, Executive Director of Corporate Clients (HSC) said, "The downside is exaggerated by the supply of stocks on the market as some large deals are about to begin, in addition to the cautious sentiment of foreign investors."

Learn more: 
Vietnam stock market: what awaits in Q4

Categories:
Financial News

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