Vietnam Mekong Housing Bank IPO misses fund raising target
Print 
Mekong Housing Bank (MHB), one of Vietnam's five remaining wholly state-owned lenders, sold fewer shares and raised much less than targeted in its IPO amid concerns about its valuation and profit outlook as credit growth slows.
MHB's initial public offering is part of a drive by Vietnamese banks to raise funds, which also include selling stakes to new foreign investors and existing shareholders.
Japan's Mizuho Corporate Bank is expected to buy an up to 20 percent stake in Vietcombank, sources familiar with the matter told Reuters on Wednesday, in a deal worth more than US$500 million. That would mark Vietnam's largest-ever inbound acquisition.
Vietnam's banking sector is struggling to cope with constraints on credit growth, as the government seeks to fight inflation, which in June topped 20 percent on an annual basis.
Ho Chi Minh City-based MHB raised VND196.84 billion ($9.57 million) after it sold 17.9 million shares at an average price of VND11,025 per share, well below the 64.6 million shares on offer, the Ho Chi Minh Stock Exchange said in a statement issued late on Wednesday after the auction.
No foreign investors have registered to buy MHB shares, even though they were allowed to buy all the shares on offer, the exchange said.
Investors were put off by MHB's weak performance compared to rivals and by a slide in the local market in general, brokers said.
The VN Index on the main exchange in Ho Chi Minh City has dropped 14.8 percent this year to 413.06 points on Thursday, and the Hanoi market also shrunk 37.5 percent to close at 71.35 points.
Weak investor sentiment has sparked concern over the upcoming IPO by Hanoi-based Petrolimex, the country's largest oil product importer and distributor, slated for July 28.
Domestic investors bid for MHB at between VND11,000 and VND15,000 per share, compared with the bank-set initial price of VND11,000, the exchange's statement said.
After the IPO on Wednesday, MHB is now 3.95 percent owned by Vietnamese investors, 12 of them institutional shareholders and 3,730 individuals, based on the exchange's statement.
It was not immediately clear when MHB is going to make its share debut. IPOs and share listings are two separate processes in Vietnam, which opened its first stock market in July 2000, with debuts often taking place months or years after the IPO.
In a separate development, the government will only allow a maximum of three strategic investors to buy shares in a state-owned company that undergoes privatization, Prime Minister Nguyen Tan Dung said in a decree seen by Reuters on Thursday.
Strategic investors are not allowed to transfer shares within five years, said the decree, signed on July 18 and which will come into force on Sept. 5. Vietnam does not currently limit the number of strategic investors in a domestic firm.
Companies dealing with insurance, banking, post and telecoms, aviation, coal mining, crude oil and gas production will have to secure government permission before selling shares to strategic investors, the decree said.
Two commercial banks, Agribank – the country's largest by assets – and BIDV, as well as policy lenders Vietnam Development Bank and Vietnam Bank for Social Policies remain 100 percent owned by the government. ($1 = VND20,570)
