|
Around 20 of them, all joint stock banks, will have to do so and raise the required capital by end of the year.
State
Bank of Vietnam Governor Nguyen Van Giau has recently announced a
roadmap for further augmenting capital to 5 trillion dong and then 10
trillion dong in a few years, which will mean more banks will have to
get cracking.
But things cannot be more loaded against someone trying to issue shares.
The stock market remains gloomy, with the VN Index hovering around the 500 point mark, more often below it.
Banking shares are no longer popular with investors, especially those of banks performing poorly.
To
cap it all, Dragon Capital has begun to divest its 19 million shares in
Sacombank this month. The share is a leader in terms of liquidity at
the Ho Chi Minh Stock Exchange. Military Bank, which also sees huge
trading volumes on the informal OTC market, is all set to list. These
two large banks threaten to cut the ground from under the feet of the
smaller ones.
Ownership
rates for individuals and institutions have been falling, respectively
reaching 10 percent and 20 percent last year, and could fall further to
5 percent and 15 percent next year under a bill on lending
institutions. The central bank wants to head off any possible
domination of a bank by a small group of shareholders.
Thus, those with the capacity to invest may be disqualified while others who are eligible may not have the money.
Nevertheless,
several banks like Dai A and Mien Tay are going ahead with preparations
to list, expecting it would help raise funds.
Banks that cannot raise the additional capital face liquidation or merger.
M&A activity picks up
Son
Ha, a company listed in HCM City with interests in mechanical
engineering, renewable energy, and property, is likely to sign a
contract to sell stakes to a strategic partner tomorrow.
It
will issue 10 million shares to increase its chartered capital to 250
billion dong ($13 million) from the current 150 billion dong.
This follows a busy week of mergers and acquisitions.
Last
Wednesday the Sai Gon Metropolitan Ltd, the foreign partner in the firm
that built the Sai Gon Metropolitan office building in HCM City,
announced it would buy out the 30 percent stake held by its local
partner, Binh Minh Construction Company.
This British Virgin Islands-registered company has agreed to all conditions by Binh Minh.
Gia
Quyen, or Empower Securities Company, concluded a deal to sell 49
percent to a Korean company, the maximum stake allowed under the law.
The
local company will sell more than 12.86 million shares to the Korea
Investment Securities Company, doubling its chartered capital to 270
billion dong. EPS has to get approval from the State Securities
Commission for its issuance.
EPS expects its partner to bring in Korean investors and provide consultancy to Vietnamese companies wishing to list overseas.
Also
last week, Hoa Phat Group bought almost a 50 percent stake held by
others in Hoa Phat Energy Joint Stock Company to increase its ownership
in the company from 50 percent to 99.86 percent.
The company says this would help it improve operations.
As usual, none of the parties in any of the deals were willing to disclose the sums involved.
The
developments are in line with the forecast by the auditing and
consulting firm PricewaterhouseCoopers of a growth in the number of
such deals this year.
Inbound
strategic acquisitions and private equity deals are being fuelled by
the global economic recovery and positive sentiment about Vietnam's
ability to continue to grow at strong rates despite the crisis,
according to the firm.
Anti-dumping alert
With
Vietnamese businesses often getting caught up in anti-dumping troubles,
the Ministry of Industry and Trade has decided to set up an early
warning system on anti-dumping.
It
plans to create an internet based system early next month to warn about
anti-dumping proceedings against Vietnamese goods so that exporters
will have time to respond to punitive action by importing countries.
The
system will initially cover proceedings in the US and Europe, Vietnam's
two key export markets, before enlarging the coverage to other markets,
according to Bach Van Mung, director of the ministry's Department of
Competition Management.
The status of exports will be indicated in three different colors in the system.
Green
will indicate that the export items are normal while yellow will mean
the commodities are in danger of being sued for selling at below market
prices.
Red will indicate that a product group faces the highest risk of anti-dumping proceedings.
Recent anti-dumping proceedings have caused huge damage to Vietnam in terms of profits and jobs.
The
country's industry groupings have proved inadequate in dealing with
such proceedings while enterprises were taken by surprise by the
lawsuits due to the lack of information.
A
lawsuit by the European Bicycle Manufacturers Association led to a
decision by the European Union to slap anti-dumping tariffs of up to
34.5 percent on Vietnamese bicycles in 2005.
Vietnamnews
|
