The VN Index has been sliding

In mid-2017, Vietnam’s stock market heated up with a series of state divestment deals. The prices of shares sold to foreign investors were then at record high, which brought a big surplus to the state budget. The sales of Vinamilk and Sabeco shares were typical examples.

However, analysts commented that in the cases of Vinamilk and Sabeco, foreign investors poured money into the companies in a long-term investment plan. 

But things are different for foreign investment funds which poured money into commercial banks. The value of the investment items has been decreasing proportionally with the share price reduction and VN Index decline. 

The situation is even worse for investors as the dong is depreciating. The dong has lost 2 percent of its value so far this year.

The VN Index, after reaching the peak of 1,200 points, has been decreasing. In such a context, the price of bank shares dropped by 20-40 percent compared with the price levels established at the time when the VN Index was at the 1,200 point threshold.

Among the commercial banks which were the most successful in selling shares to foreign investors in 2017, VP Bank, HD Bank, TP Bank and Techcombank were the best known. All four banks listed their shares on the bourse after the sale.

As for VP Bank, the bank’s shares were sold last year at VND39,000, equal to the reference price when VP Bank made its debut on the HCMC bourse. One year later, VP Bank share is now traded at VND26,000.

Techcombank holds the record in selling shares to foreign investors. Though Techcombank shares (TCB) just entered the bourse last June, they cannot avoid the downward trend of the market.

TCB made its debut at the price level of VND128,000 per share, which was also the price at which the bank sold shares to a series of foreign investment funds in April.

Techcombank became ‘famous’, because TCB had a market share price over VND100,000 per share, which had not been seen in many years.

However, the TCB price dropped dramatically after entering the bourse, now traded at VND25,000-26,000.

Similar things have happened with TP Bank. The shares were sold to foreign funds at VND30,000, but are now traded at nearly VND27,000.

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Mai Thanh