Some banks are collecting treasury stocks to reduce the number of shares in circulation and reduce foreign ownership ratios. This is seen as preparation to receive ‘big fish’ who are ready to spend big money to acquire Vietnam’s bank shares.
VP Bank has approved a plan to buy back shares for treasury stocks (5 percent of total shares in circulation) and reduce the foreign ownership ratio from 23.45 percent to 15 percent.
The bank said some foreign investors sold VP Bank shares on the bourse during Covid-19, and it believes that this is an opportunity for it to buy back the shares and reserve a share proportion for some foreign investors who can help the bank develop.
“If we sell shares to these investors, we will get bigger benefits than issuing shares in small quantities to small investors,” Bui Hai Quan, vice president of VP Bank, explained.
“We reduce the room for investors trading shares on the market and reserve a large proportion of shares for big investors,” he said.
A representative of the bank also revealed that the bank may offer to sell 49 percent of its subsidiary FE Credit. The bank has resumed negotiations with partners after a period of interruption because of Covid-19.
|VinaCapital, in its report about attracting FII (foreign indirect investment) to Vietnam, said that Vietnam has the opportunity to lure huge investment capital in post-Covid-19 period as central banks may print $6 trillion more in 2020 through quantitative easing programs.|
VinaCapital, in its report about attracting FII (foreign indirect investment) to Vietnam, said that Vietnam has the opportunity to lure huge investment capital in post-Covid-19 period as central banks may print $6 trillion more in 2020 through quantitative easing programs.
The amount of money is likely to flow into frontier and emerging markets where investors can expect higher profitability.
The US FED president Jerome Powell said that the agency may inject $4 trillion more into the US economy to save companies from bankruptcy. VinaCapital thinks the move is similar to what it did in the years just after the 2008 global financial crisis.
The scale of quantitative easing packages this year is three times bigger than that in the post-2008 financial crisis. This is the reason why Nasdaq index has risen by 4 percent compared with the beginning of the year. A proportion of the amount is predicted to flow into markets like Vietnam.
VinaCapital believes that Vietnam should try to attract huge capital flow by offering larger room for foreign investors and equitize enterprises such as Viettel (telco), MobiFone (telco), EVN (electricity) and PetroVietnam (oil and gas).
As many as 102,000 trading accounts opened in the last months, showing the attractiveness of the stock market.
The recent interest rate cuts by the State Bank of Vietnam (SBV) have little impact on the Vietnamese stock market.