Foreign investors seek more shares in infrastructure company
Foreign investors have poured trillions of dong into shares of large infrastructure companies which promise modest but stable profits.
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In the first nine months of 2017, foreigners were the net buyers of VND13.5 trillion at both Hanoi and HCMC bourses. Securities firms noted that they not only eyed shares with high capitalization value, but also hunted for shares of industrial zone infrastructure developers.
On the Hanoi bourse, VGC of Viglacera and HUT of Tasco are the two names which most attracted foreign investors. Foreign investors’ net purchase of VGC was VND315 billion, while the figure was VND151 billion for HUT.
They also spent nearly VND2 trillion to buy VGC and HUT through auctions and specific issuance campaigns. The auction of 120 million VGC to the public in late May attracted many buyers with the average price of VND16,175 per share.
More than 109 million shares, or 91.65% of total shares offered, were collected by foreign investors. Dragon Capital spent VND1 trillion more to buy 59.5 million more VGC. With the latest deal, it now holds 76 million shares, or 17.82% of Viglacera stake.
VinaCapital also became a big shareholder of Viglacera with a 5% stake.
Fecon (FCN) has decided to lift the foreign ownership ratio ceiling to 75% in order to attract foreign capital to large projects on transport infrastructure and energy.
PYN Elite Fund is now one of the big shareholders with 7.4 million shares, or 15.63% of capital. The successful IPO of IDICO days ago is also proof of the high interest by foreign investors in infrastructure shares.
More than 55 million shares were sold on October 5, of which 41.3 million shares were collected by foreign investors, 74.8% of the shares offered at the IPO.
A source from IDICO said investment funds showed interest in the IPO. Besides Dragon Capital and Vinacapital, investment institutions from Thailand, Japan and the Republic of Korea asked for information.
IDICO is a big player in electricity, transport and industrial zone development, but the corporation’s business performance is not impressive. The leasing of industrial zones brings VND450 billion worth of profit, the major source of profit of IDICO.
The investments in electricity, construction & installation and other activities have not brought profits.
However, an analyst commented that foreign investors are still pouring money into IDICO because they hope for a major change in the company after equitization. The possibility of improving the profit margin is very high.
The Ministry of Construction (MOC) plans to continue divesting Viglacera shares to reduce its ownership ratio to 36% by 2019.
