The stock market of Vietnam is bustling with banking and securities stocks as the backbone, as the potential of banking stocks is attracting the attention of foreign investors.
|Do Quang Hien, Chairman of Saigon-Ha Noi Commercial Joint Stock Bank (SHB).|
After a series of gaining sessions in May and early June, which helped the stock market rise to historic peaks, the prices for banking stocks slowed down but they are still historically high, with high liquidity, and are promising.
On June 15, the prices for stocks of big banks such as Vietcombank, Vietinbank, Techcombank all increased. Many banks had prices for their stocks rocketing by 50-100% compared to those in early 2021. According to Dragon Capital, valuations of bank stocks and the stock market of Vietnam are still very attractive. A number of Vietnamese bank shares are being eyed by foreign investors.
However, on the stock market, few banks still have room for foreign investors. The Saigon-Ha Noi Commercial Joint Stock Bank (SHB) is the only large-cap bank that still has room for foreign investors. In May, SHB shares were added to the portfolio of the MSCI Frontier Market Index (the reference index for the MSCI Frontier Markets Index ETF).
Recently, SHB approved the maximum ownership rate of foreign strategic investors to 20% of its charter capital, and fixed the foreign ownership ratio at 10%. At a recent shareholders’ meeting, SHB said that it had selected 2-3 foreign partners to negotiate divestment at SHB FC. This bank wants to transfer capital in SHB Laos and SHB Cambodia to foreign investors.
SHB has completed the dossier to submit to the State Bank of Vietnam for the increase of its charter capital to more than VND26,674 billion. This is considered an opportunity for shareholders to buy additional issued shares at preferential prices.
A recent report of MB Securities Company (MBS) said that bank stocks still play a leading role in the market in the near future, thanks to its advantage in liquidity and supporting information. A report on the outlook of the banking sector of BIDV Securities Company (BSC) also said that banks will get high profit growth thanks to the recovery of the economy and good control of asset quality after the epidemic.
Recent information on dividend payments and stock issuance for domestic and foreign investors to increase capital of banks has attracted strong attention from investors. The price for Vietinbank (CTG) shares are standing close to a historic peak after the State Bank of Vietnam approved a dividend payment to increase capital by nearly VND 10,000 billion. The shares of Military Bank, LienVietPostBank and Ocean Bank also reached historic heights after such information.