Vietnam bank in line for first foreign IPO-sources

The state-run Bank for Foreign Trade of Vietnam, Vietcombank, is planning an initial public offering that would be the country’s first foreign stock listing. Vietcombank had assets of US$8.3 billion at the end of 2005, up from US$7.6 billion a year earlier.
The government has allowed Vietcombank to sell up to 30% of its equity in phased sales due to begin this year.
For this IPO, four global investment banks – Citigroup, Credit Suisse, Goldman Sachs and UBS – have been asked to submit IPO proposals.
 
The bank may seek a dual domestic and overseas listing, with Hong Kong or Singapore potentially hosting the offshore part of the deal.
A little background:

• Earlier in October’05, Vietnam has issued its first-ever sovereign debt of US$750 million (RM2.78 billion) bond sale which was arranged by Credit Suisse.

• Non-performing loans at banks in Vietnam account for roughly 4% to 8% of the total.

• In December Vietcombank sold about US$88 million worth of seven-year domestic currency convertible bonds to local institutions and investors. The bank had hoped to list the convertible bonds on the Ho Chi Minh City stock exchange in February, but industry sources have said the listing would be delayed until March.

• Vietnam is looking to build up its fledgling stock market, but with market capitalisation of just US$1.2 billion and thin liquidity, its ability to absorb a big local IPO is limited.

• On one day in January alone, the bourse’s market value more than doubled because of the trading debut of dairy producer Vietnam Dairy Products Co.

• The Vietnam Index has gained 57% in the past year.

• The country’s banking sector has been among the most active for corporate activity.

• Since early 2005, HSBC Holdings, Standard Chartered Plc. and Australia and New Zealand Banking Group Ltd. have bought 10% stakes in Vietnamese lenders.

• Singapore’s Oversea-Chinese Banking Corp is expected by year-end to buy a 10% stake in part-private, unlisted Vietnam Joint Stock Commercial Bank for Private Enterprise, or VP Bank, which has a market value of US$90 million.

• Vietnam limits foreign ownership in its banks to 30%.

• VP Bank, the Bank for Investment and Development of Vietnam (BIDV) and Vietcombank have all been expected to list domestically.

           ( Source: The Edge 24/2/06)