Vietnam IPOs and divestment expected to generate $26.3 bn over two years

Jul 24, 2018
IPOs forecast to make $9.7 bn, state-owned divestment $16.6 bn

Vietnam-based Saigon Securities (SSI) has forecast that IPOs and divestment of state-owned enterprises (SOEs) will generate proceeds in the region of $26.3 bn in 2018-2020 in the country, nearly three times the figure generated during 2011-2017.

The value of IPOs is forecast to reach $9.7 bn while divestment is expected to fetch $16.6 bn. ‘Vietnam could end up being the only country in the world that embarks on a new wave of SOE reform in 2018-2020,’ SSI says in a statement.

Vietnam’s government raised about $940 mn from selling 1.3 bn shares of SOEs in 19 IPOs in the first half of the year, according to DEALSTREETASIA and RongViet Securities.

Of these, 90 percent of the value and volume of shares offered came from six big deals, including three PetroVietnam subsidiaries: Binh Son Refining and Petrochemical, PetroVietnam Oil Corporation and PetroVietnam Power Corporation. The other three big IPOs were those of Hanoi Trading Corporation, Vietnam Rubber Group and the Vietnam Southern Food Corporation.

Meanwhile, sales of SOE stakes also made VND6.5 tn ($286 mn) for the government in the first half of the year, according to the latest report from the Ministry of Finance. Of this, divestment value of sensitive sectors including securities, finance, banking, insurance, real estate and investment funds reached VND434 bn while the government earned VND 507 bn.

Vietnam has stepped up its planned divestment from hundreds of SOEs to boost their performance and ease a tight state budget. In February, the government announced the establishment of a committee to oversee its stake in 30 local firms valued at VND5.4 quadrillion, which were previously managed by several ministries, as part of an effort to boost equitization.

Recently, the country has deposed traditional money markets such as South Korea, Singapore and Australia in IPO listings to become the fourth leading Asia Pacific-based issuer in terms of value in the first quarter this year, according to Baker McKenzie’s latest report, North America Capital Raising Drives Cross-Border IPOs.




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