Techcombank's shares price plummeted upon its first listing on bourse

By Ngoc Anh - Jun 04, 2018 | 05:12 PM GMT+7

TheLEADERTechcombank's shares price was steeply reduced by 20 per cent to VND102,400 ($4.49) per share, lower than initial reference prices of VND128,000 ($5.6) making the bank's capitalization value dropped by nearly $1.32 billion.

Dropping by 20 percent, TCB shares were traded in the range of VND102,400 ($4.49) to VND153,600 ($6.74) per share (capitalization ranges from $5.3 billion to $7.9 billion). 

Ho Hung Anh, Chairman of Techcombank performed gong rituals

Initially, it was announced that on June 4, nearly 1.17 billion TCB shares of Techcombank would officially be traded on Ho Chi Minh City Stock Exchange (HOSE) with a reference price of VND128,000 ($5.60) per share, which is 5.5 times higher than the initial purchase price from the Hongkong and Sanghai Banking Corporation (HSBC) nearly a year ago.

At the price of VND102,400 ($4.49) per share, Techcombank will have a capitalization of around $5.18 billion, the second highest listed bank at present, after Vietcombank which has the market capitalization of over $8.4 billion.

Previously, Nguyen Xuan Minh, Chairman of Techcom Securities, a wholly owned subsidiary of Techcombank said that the share price was set based on the value of the bank.

Investor's demand is also a factor influencing the high share price, with an over $4 billion of registration volume from foreign investors , the demand is very high compared to the number of Techcombank share.

After listing, Techcombank plans to issue 2.33 billion bonus shares for existing shareholders at a ratio of 1:2, raising the charter capital to $1.5 billion, surpassing both BIDV and Agribank.

Additionally, Techcombank's shareholder structure remains unchanged upon the issuance, with a foreign ownership ratio of 22.5 percent.

Techcombank is expected to convene an extraordinary shareholder meeting on June 14 to approve this plan.

The State Bank of Vietnam recently approved two leading commercial banks, namely VPBank and MB to raise its charter capital, the move being considered as necessity to increase their competitiveness and satisfy with standards of Basel II to control risks of credit, market and operation.

Accordingly, Viet Nam Prosperity Joint Stock Commercial Bank (VPBank) will increase its charter capital from from VND15.7 trillion ($690 million) to VND25.299 trillion ($1.111 billion).

Military Commercial Joint Stock Bank (MB)’s charter capital will be raised from VND18.15 trillion ($799.56 million) to VND21.6 trillion ($951.5 million).

Techcombank established in 1993 with initial charter capital of only $877,000. If the planned capital increase is successful, the bank's charter capital will increase by 1,750 times after 25 years of operation.