The attraction of state-capital withdrawn stocks.
In 2015, State Capital Investment Corportaion (SCIC) has sucessfully withdrawn state-owned capital in 120 enterprises among which 116 were sold out, earning 4.491 billions dong over 1.682 billions dong of book value, making a gaining ratio of 2.7. Compared to 2014, the trading results in 2015 outperformed by 2.32 times in value and 1.6 times in quantity.
The value of many enterprises once taken over by private sector has risen impressively.
One of the “super stocks” in the capital withdrawing wave is VEF of Giang Vo Exhibition Center. Being offered in IPO first at par value, afer 2 months on Upcom, its market price has grown by 4 times, reaching over VND 41,000 in the last trading session of Febuary.
With many investors, 30 minutes scrambling for 122 milions GEX stocks of Vietnam Electrical Equipment Joint Stock Corporation (Gelex) offered by Vietnam Ministry of Industry and Trade with the total exchange value of over 2.100 billions dong became an unforgetable moment.
The average buying price was only VND 17,700 back then. Then after 2 months, when the historical capital withdrawing occurred, GEX reached nearly VND 24,000, even VND 26,500 in some moments, a 50% growth rate equally.
Another example is CTX Holdings stocks. After being withdrawn by SCIC at the average price around VND 20,000, the stock has grown to VND 27,700, rising 38% within the first trading week after the capital withdrawal.
According to finacial experts, the reason why investors are so much interested in those companies lays in their properties, namely real estate. After the pubic – private ownership transfer, a company ran by private owners with more competence in exploiting assets will help properties’ value increase significantly after being revalued.
Capital drawing enterprises stock hunting race.
In 2016, the historical capital withdrawal in SCIC is expected to occur soon, with trading value at nearly 4 billion USD. With enormous capital withdrawing value, Mr. Huynh Anh Tuan – SJC’s Director assumes that foreign participation is necessary. The president of Vietnam State Securites Commission has recently confirmed to work with Ministry of Finance and Ministry of Planning and Investment to issue a circular guiding Decree 60 which helps unfreeze the foreign capital flow.
The strong surge of capital withdrawn stocks’ price has set a trend for hunting these stocks. This race would become more intense when receiving positive response from both internal and external sides. Most experts in the stock market have judged the stock price will strongly fluctuate immediately after the new owner’s name appears.
In the meanwhile, many state-capital M&A deals are continuously sealed. Thong Nhat Production And Investment Joint Stock Company (GTN) has bought 75% stake of Vietnam Tea Corporation- Vinatea while continuing to keep an eye on other large corporations like Vietnam Livestock Corporation and Vietnam Forest Corporation. Besides, private sector is spending trillions to acquire state-owned enterprises such as Kim Lien Hotel, Gelex and Vinamotor. Before that, Bamboo Capital Company (BCG) has quickly got hold of state-owned shares in Transport and Industry Development Investment Join Stock Company (Tracodi) and 1-5 Auto Company. BCG are also planning to bring both companies to the stock market in 2016.
Apparently, since being sold to private owners, the value of state-owned companies has been remarkably changed, with the ultimate goal is to improve competitive edges and empower Vietnam enterprises’ position. This trend is happening and will certainly be elevated as investors are waiting for coming historical capital withdrawals.
Minh Quyet
Tri Thuc Tre