Investors await a boost in the IPO market

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Recent developments in the Vietnamese IPO scene have paved the way for a series of high-profile offerings. These include Vinpearl, a subsidiary of the famous Vingroup conglomerate, known for its extensive portfolio of five-star hotels, resorts, spas, conference centers, culinary establishments and five-star golf courses in through Vietnam.

Vinpearl’s board of directors recently approved a request for a public offering to existing shareholders, a move that brings the real estate giant closer to the launch of its highly anticipated IPO.

The approved plan outlines the upcoming public offering, which is expected to take place in the fourth quarter of 2024 or the first quarter of 2025.

The company aims to issue 70 million shares at a rate of 1,000:40.673. With a price of 71,350 VND per share (2.81 USD), its fundraising target is over 5,000 billion VND, if all shares are successfully distributed to shareholders.

Vietnam’s IPO landscape has gone through a gloomy phase following the outbreak of the COVID-19 pandemic, with state-owned companies largely absent from the public market spotlight.

Instead, private companies have taken center stage, with notable examples such as DNSE Securities JSC’s recent offering, which sought to sell 30 million shares to investors, symbolizing resilience and adaptability of the private sector in these difficult times.

As 2024 draws to a close, the Vietnamese market is poised to experience an IPO renaissance, with policymakers focusing on improving transparency and simplifying administrative procedures to encourage IPO activities. IPOs that align perfectly with listing requirements.

Shortly after the National Assembly officially approved revisions to nine laws, including the Securities Law, a draft Amendment Decree 155/2020/ND-CP, which details the implementation of specific provisions of this law, is currently being reviewed by the Ministry of Finance and the National Securities Commission of Vietnam.

The proposal to streamline the listing process from 90 days to just 30 days has sparked investor optimism, promising better rights protections and potentially serving as a catalyst for more companies to make the jump to the public market.

By shortening the securities listing process and removing unnecessary bureaucratic hurdles, regulators aim to strengthen investor protection and foster a more efficient trading environment within the organized market.

In the draft amendment to Decree 155, emphasis is placed on expanding market access for foreign investors, particularly to upgrade the market from frontier market status to emerging market status.

Projections indicate an increase in foreign investment after Vietnam emerges as a new market, but the challenge remains to identify specific avenues for the deployment of foreign capital once the stock market reaches secondary emerging market classification .

As technology becomes a major attraction for investments, the scarcity of technology stocks in the Vietnamese market highlights a weakness in diversity. The lack of available shares in this sector poses problems for foreign investors looking to deploy their capital efficiently.

According to Nguyên Thê Minh, director of analysis at Yuanta Securities Vietnam, once the FTSE improves Vietnam’s market status, its market capitalization will be compared with its peers. Stagnant market capitalization risks excluding the country from the list of emerging markets.

In Vietnam, the separation of IPOs and listings causes delays for investors, especially foreigners, who must wait months after purchasing before trading. Reducing the gap between IPOs and one-month listings could encourage increased listings.

The evolution of the Vietnamese financial market offers a compelling picture of growth and opportunities for local and international investors.

As companies prepare to unlock value through public offerings, the stage is set for investors to take part in the growth trajectory of dynamic companies poised to scale and succeed.

VNA/CVN