Thanh Nien talked with Huynh The Du, an economics expert from the Fulbright Teaching Program in Ho Chi Minh City (HCMC), about his views on the flagged IPO of the lender.

What do you think about Vietcombank's IPO delays?

In my opinion, a delay of the IPO will be necessary if the state-run commercial bank needs more time to search for big overseas companies to be its strategic investors.

The government expects that a successful IPO of the lender would set a standard for the remaining big state-owned commercial banks, so several months or even a year late is not a big deal.

But if lower than expected bidding prices are the reason for the delays then that would be a mistake.

Some people have said selling Vietcombank's shares to foreigners at a low price would mean a loss for the government's asset, but I don't agree with them.

Large foreign companies are good enough to assess the actual value of a stake in the domestic lender.

For instance, American investment bank Goldman Sachs and two other foreign investors acquired a 10 percent stake in the state-owned giant Industrial and Commercial Bank of China (ICBC) for only US$3.8 billion last year.

Ten percent stakes in the China Construction Bank and the Bank of China had already been bought for $2.7 billion and $3 billion respective­ly.

Did those large state-owned lenders sell their stakes at low prices? I don't think so.

Therefore, Vietcombank shouldn't hesitate to float its stake just because the bids from foreign investors were not as much as it expected.

Do you think the delay is affecting the stock market?

At present, there are only two commercial banks, ACB and Sacombank, already listing on the market.

Domestic investors seemed to rely on those two lenders' share prices to trade other banks' shares on the informal over-the-clock (OTC) market.

So information about the IPO of the largest lender, Vietcombank, will surely affect the stock market, particularly listed finance and bank firms.

There is a rumor that Vietcombank's shares have been assessed at between VND43,000 and VND65,000. Do you think those prices are too low?

At those prices, ten percent of the lender will amount to $400-600 mil-lion and its market value will reach $4-6 billion. I think those prices are reasonable.

It was proved through ICBC's IPO last year.

Goldman Sachs last year spent $3.8 billion on a 10 percent stake in ICBC.

So the US-based investment giant surely won't pump billions of dollars into Vietcombank which is a much smaller lender.

According to my assessments, the actual assets of Vietcombank are now around $3.5 billion and it will approach about $7 billion in five years.

Many people hold the opinion that Vietcombank's shares should be sold at a very high price but I don't agree with that.

For me, the most important thing is how to make strategic investors really want to bolster the firm that they have invested in.

The starting price, which may be at a little bit low, will gradually climb up.

That's better than a high starting price which slides down each session.

If the rumor comes true, shares in the financial and banking sector could be offloaded. Would it put the stock market in particular and the economy in general in danger?

I think changes in share prices seem to affect to stock investors, not listed companies.

So banks and the economy wouldn't be affected by bank stock falls.

Do you think Vietcombank should continue to delay its IPO?

In my opinion, General Electric Co., Nomura Holdings Inc. and Goldman Sachs, who have registered to become Vietcombank's strategic investors, all really want to invest in Vietnam.

Many people worry foreign investors would acquire the lender's stake for a low price.

But as I said, they are global investors who can make accurate assessments.

We can offer high-price shares to speculators, who will lift share prices up and then sell them off to make huge profits.

So who do we want? Investors who will work alongside of us to develop the bank or speculators?

Source: ThanhnienNews.