Banks move listing from UPCoM to the centralised market

VNStockNews.com - Instead of preparing to list on UPCoM market, many banks and the enterprises being listed on the UPCoM floor have already started to eye listing on the centralised stock market, UPCoM has not been attractive as for banks any more despite in October early, commercial banks themselves can decide the listing on UPCoM without SBV's permission.

Previously, when UPCoM -called the securities trading market for unlisted public companies-officially started operation, SCB, DaiABank and OCB decided to make procedures to put bank shares into transactions on the floor.

But recently SCB cancelled the plan of listing on UPCoM before officially obtaining license while DaiA Bank (coded DAB) gained Hanoi Stock Exchange's permission to list 100 million DAB shares at 10,000 dong par on UPCoM. With this event, DaiA Bank was expected to become the first listed bank on the market.
Accordingly, DaiA Bank will go on UPCoM in the middle of November. However, the bank proposed shareholders to re-consider the listing move to Hochiminh Stock Exchange (STC) instead of UPCoM.

Director board of DaiA Bank said that the small trading size of UPCoM could affect he market price of DAB so the reconsideration of floor moving is necessary. Finally, on November 9, the bank decided to abolish the transaction on UPCoM and stop deposit at Securities Depository Centre and prepared listing on the southern official stock market.

After seeking shareholders' approval on issuing second-phase shares to hike chartered capital from 2.304 trillion dong to 2.568 trillion dong, Southern Bank announced it would make legislative procurements to go on the official stock floor.

STC said approving Western Bank's registration to list 100 million ordinary shares on the bourse. Western Bank also was licensed to raise its chartered capital to two trillion dong. Till late September, the pre-tax profit of Western Bank reached 68.41 billion dong while the total assets were posted at over five trillion dong.

Meanwhile, Eastern Commercial JS Bank (EAB) wants to sell shares to foreign strategic shareholders to hike capital from 3.4 trillion dong to 4.5 trillion dong. But, in the context of global economic downturn, the share sales will not bring benefits as expected by shareholders. The bank plans to list on STC by 2010. Thus, EAB decided to offer 1.1 trillion dong of shares with a price of 10,000 dong/share to reach a chartered capital of 4.5 trillion dong. Tran Phuong Binh, general director of EAB said that his bank will select a suitable time to list next year.

Similarly, LienVietBank, Maritime Bank reported they would finish the listing applications soon after gaining authorities' license.

The listing move to the official stock market will increase the option of investors as for banking-finance shares. Up to now, both STC and HNX have six listed bank shares including STB, ACB, VCB, CTG, EIB and SHB. Yet, all shares have not had big changes in prices till now.

Ending last Friday, STC listed CTG attained 32,000 dong/share, VCB at 49,800 dong/share, STB at 27,800 dong/share, EIB at 26,500 dong/share, down 1,500 dong from October 27, HNX listed ACB was traded at 41,000 dong and SHB at 27,300 dong/share.

Banking operations are still regarded to have high profitability just when the market had to face difficulties coming from the impacts of global economic storm. Factually, compared with the previous year, banks' profit target is lower but during the first three quarters, many banks reported a very high profit exceeding the full year's plan. Typically, in Jan-Oct, Maritime Bank earned 780 billion dong in pre-tax profit, higher 180 billion dong than the year's target while EAB confirmed it can reach the 2009 profit of 750 billion dong.

However, the business of small to medium sized banks was not satisfactory in the first nine months. DaiA Bank achieved only 38.62 billion dong in pre-tax profit so it had to lower the 2009 profit target from 170 billion dong to 60 billion dong.

According to Vietnam Equity Holding (VEH) under Saigon Asset Management (SAM), the development potential of banking and finance of Vietnam remains very high because the number of people using bank accounts and credit cards is small.

A stock specialist forecasted that the merger of small banks will be unavoidable but this will help the banking system operate better and more effectively if having a perfect legislative frame.

Meanwhile, as for most investors, bank shares are not subject to their priority commodity portfolio.