Commercial banks snub UpCom for exchanges

Instead of heading for UpCom as previously planned, commercial banks are now aiming to list shares on official exchanges.

UpCom not attractive any more

Several months ago, when UpCom, the market of unlisted public companies, was about to make its debut, commercial banks all promised to put shares into transactions when the market became operational.

Saigon Commercial Bank , Dai A Bank and then Orient Bank all started the process of following necessary procedures to putting share transactions on UpCom.

However, SCB no longer intends to use UpCom. Meanwhile, Dai A Bank, which received the license from the Hanoi Stock Exchange to put 100 million shares on UpCom, has rethought its decision. The management board of the bank, which was expected to be the first bank on UpCom, consulted with shareholders about listing on the HCM City Stock Exchange (HOSE) instead of UpCom.

The management board told shareholders that the scale of the UpCom market is small and the number of share items available on the market remains modest. These factors will badly affect the market price of Dai A Bank’s shares. Finally, the bank has decided to start the process to prepare to list shares on HOSE.

Meanwhile Southern Bank has announced it will submit to the State Bank of Vietnam its plan to list its shares on the exchange and will soon follow necessary procedures to obtain a license for listing.

Meanwhile, HOSE has confirmed that the stock exchange has accepted the application for listing 100 million shares on HOSE made by Western Bank.

General Director of Dong A Bank Tran Phuong Binh has said that the bank plans to list its shares on the exchange , possibly in early 2010.

MX Bank has also announced that it is taking necessary steps to list shares on official exchanges as soon as possible in order to improve liquidity and help make shares more valuable.

Similarly, Lien Viet Bank and Maritime Bank have announced that they will list on the exchanges soon, right after receiving a license.

Official bourses suffer indigestion?

Bank shares are always considered good purchases, because the banking sector always has high profitability level, even in the economic downturn. Maritime Bank, for example, has reported a pretax profit of 780 billion dong, even higher than the targeted profit set previously for the whole of 2009.

However, investors have been warned that they should not put too high hopes on bank share price increases. The prices of the six banks’ shares have not seen big changes this month in comparison with the previous month and bank share price increases, which investors expected, did not happen.

Meanwhile, analysts have warned that the supply of bank shares will increase very rapidly in the time to come, as banks all are rushing to issue more shares to raise the chartered capital to 3 trillion dong by 2010 as required by the Government.

Tags: vietnam bank, Vietnam business finance, Vietnam business finance news, Vietnam business news, Vietnam stock market