IPOs set to spice up year end trading: analysts

The Dung Quất Refinery in Quang Ngãi Province. — Photo BSR Company

HÀ NỘI — The stock market will feature a series of initial public offerings (IPOs) by State-owned enterprises (SoEs), including mega corporations, this year-end.

 Analysts say this is likely to attract cash flows and is an opportunity for investors to measure business growth for future investments.

According to the VNDirect Securities Corporation, the expected fourth quarter IPOs include big names like the PetroVietnam Power Corporation (PV Power), PetroVietnam Oil Corporation (PV Oil), Bình Sơn Refining and Petrochemical Company Limited (BSR), Vietnam Rubber Industry Group (VRG), and Vietnam Southern Food Corporation Limited (Vinafood  二).

In particular, BSR, owner of the Dung Quất Refinery, plans an IPO on November  七,  二0 一 七 with a reference price of VNĐ 一 四, 六00 (US$0. 六 五) per share, putting up  五- 六 per cent of total shares with the hope of selling a  四 九 per cent stake to a strategic partner in  二0 一 八.

While a specific date has not been announced, PV Oil is also expected to hold an IPO in the last two months of  二0 一 七. The company hopes to sell  二0 per cent of its shares at a starting price of VNĐ 一 四, 三00 ($0. 六 三 六) per share.

PV Oil has said it will sell  四 四. 七 per cent of its shares to strategic partners and 0. 二 per cent of shares to employees to reduce the level of State ownership from  一00 per cent to  三 五. 一 per cent.

Similarly, VRG’s IPO in the fourth quarter of  二0 一 七 would put on offer  一 三. 一 四 per cent of its shares at a reference price of VNĐ  一 三,000($0. 五 七) per share. In order to reduce the State ownership to below  五 一 per cent, VRG will sell  一 一. 九 per cent of shares to strategic partners and  一. 二 四 per cent to employees.

PV Power also plans to sell  二0 per cent of its shares in December  二0 一 七, at an expected starting price of VNĐ 一 四, 三 二 九 ($0. 六 三 七) per share, reducing State ownership to below  五 一 per cent.

As per the companies’ financial reports at the end of  二0 一 六, BSR has a charter capital of up to VNĐ 三 五 trillion ($ 一. 五 billion), and is considered the largest company, in terms of chartered capital, to be equitised at the moment.

The other SOEs also come with large amounts of chartered capital, like PV Oil at VNĐ 一0. 八 trillion ($ 四 八0 million) and PV Power at VNĐ 二 一. 七 trillion ($ 九 六 五 million).

Over the past five years, IPOs by the Vietnam Airlines Corporation (ACV), Vietnam Textile and Garment Group (Vinatex), Vietnam Engine and Agricultural Machinery Corporation (VEAM), or Vietnam Pharmaceutical Corporation (Vinapharm), have achieved very impressive results.

Therefore, the upcoming IPOs are expected to attract an even larger number of investors.

Nonetheless, analysts also advise that investors make no hasty decisions in their choices, and that they keep an eye on divestment in areas like aviation, transportation, beverages, construction materials and pharmaceuticals.

It is also likely that in the fourth quarter, the listed market will welcome many large companies after the IPO. According to Bảo Việt Securities Company (BVSC), the capitalisation of large companies often trigger high fluctuations in prices, so the market will be more difficult to predict in the last two months of the year.

BVSC’s picks of potential stock groups for the year end are oil and gas; banking which continue to deal with non-performing loans; pharmaceuticals which has a positive medium-term outlook; Information Technology; and real estate. It also advises investors to watch out for differences between enterprises in the same sector. — VNS