VN stocks extend gains as State unloads

Shares advanced further on both local exchanges on November 13 as investors eagerly anticipated some companies’ sale of more shares to reduce the State’s capital holdings, and by the impacts of the APEC event last week.

Stock brokers work on the Hanoi Stock Trading Centre (Photo: VNA)

Stock brokers work on the Hanoi Stock Trading Centre (Photo: VNA)

The benchmark VN Index gained 1.28 percent to close at 879.34 points. It has increased by a total of 5.5 percent in the last seven sessions.
On the Hanoi Stock Exchange, the HNX Index added 0.39 percent to end at 106.79 points, extending its growth for a fourth session with a total gain of 1.9 percent.
More than 283.7 million shares were traded on the southern bourse, worth 13.4 trillion VND (597.3 million USD), while the northern market traded more than 59.2 million shares, worth 725.3 billion VND.
Market trading condition was negative as losing stocks outnumbered gaining ones by 284 to 184 on both local exchanges.
The figures posted an increase of 47 percent in trading volume and nearly 58 percent in trading value compared to the average numbers of last week.
The sharp rise of trading liquidity on November 13 was attributed to foreign trading of dairy producer Vinamilk (VNM) shares.
VNM shares rose by 6.2 percent and have risen a total of 17 percent after the last four sessions.
More than 40.5 million shares of Vinamilk were traded November 13 via both put-through and order-matching methods, including more than 36 million shares purchased by foreign investors via put-through transactions.
Foreign investors posted a net buy value of more than 286 billion VND, a decrease of 81.8 percent in value compared to November 10.
Vinamilk is among five listed companies in which the State Capital Investment Corporation (SCIC) plans to offload the State’s ownership in 2017.
The four others are Vietnam Construction & Import-Export Corporation (VCG), Tien Phong Plastic Co (NTP), Binh Minh Plastic Co (BMP) and IT group FPT Corp (FPT).
VCG surged 8.3 percent, NTP and BMP soared 10 percent and 6.9 percent, respectively, hitting their daily increase limits, and FPT jumped 3.4 percent.
Among the four firms, SCIC will organise a roadshow on November 16 to introduce VCG to potential investors in an attempt to sell 96.25 million shares or 21.8 percent of the company capital.
Investor confidence also improved after Vietnamese companies signed a total of 12 billion USD worth of contracts with US companies during the week-long APEC event.
Truck dealer Hoang Huy Investment Financial Services Co (TCH) on Sunday signed a 1.8 billion USD agreement with the US-based Navistar International Corporation to import 100,000 trucks between 2018 and 2027. The company shares hit their daily increase limit of 6.9 percent.
According to Bảo Việt Securities Company (BVSC), though the stock market showed strength on Monday with the rise of trading liquidity—which would support the market growth in the short term—losing stocks still dominated the market.
It proved investors were becoming more cautious and they tried to sell off the stocks to earn profits, on worries that the VN Index will retreat when it hits the level of 880 points, BVSC said in its daily report.
If the benchmark index starts falling, it is expected to bounce back again when it reaches the range of 850-855 points, the company said.
New foreign shareholder acquires Vinamilk shares from SCIC
The Singapore-based automotive group Jardine Cycle and Carriage has acquired a 5.53 percent stake in Vietnam’s largest dairy producer Vinamilk through its wholly-owned unit Platinum Victory for 616.6 million USD in cash, the company said on November 13.
The Singaporean firm bought Vinamilk’s shares from Vietnam’s State Capital Investment Corporation (SCIC), which represents the Vietnamese Government to manage the State’s capital in the local companies.
SCIC had previously sold off all of its 48.33 million shares, or a 3.33 percent stake in Vinamilk, via an auction on the HCM Stock Exchange on November 10 for 396 million USD, higher than expected.
Vinamilk’s shares were transferred at 186,000 VND each, 24 percent higher than the initial asking price and 7 percent higher than the price at closing time on November 10 trading session.
After the latest deal, SCIC remains the largest shareholder in Vinamilk with 36 percent ownership and retains its senior voting right in the company. The State-run firm is followed by Jardine Cycle and Carriage (5.5 percent ownership) and another Singaporean firm, Fraser & Neave (5.4 percent).
Fraser & Neave, a subsidiary of Thai conglomerate TCC, purchased 5.4 percent of Vinamilk shares from SCIC in December 2016. The sale came in under the expected 9 percent the government originally planned to sell.
JC&C, a subsidiary of Hong Kong-based conglomerate, has marked its presence in Vietnam for decades, with a 25 percent stake in Truong Hai Automobile Joint Stock Company (Thaco), the largest car manufacturer in Vietnam, and 23 percent in Hochiminh Stock Exchange-listed REE Corp (REE).
The latest deal increases Jardine Cycle & Carriage (JC&C)’s exposure to the Vietnamese economy, and it remained open to making further such investments, the company added.
“The taking of this interest in Vinamilk is in line with the JC&C group’s strategy of investing in market leading companies in Southeast Asia. In particular, it increases JC&C’s exposure to the Vietnam economy,” it said in the statement.
Other larger shareholders include Dragon Capital, VinaCapital, Matthews Asia, and Arisaig Partners.

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