SCIC’s divestment plan still up in the air
Rapid-fire news about state divestment from 10 profitable state-owned enterprises emerged in 2016, but no further news has been reported this year.
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In the second week of May, F&N Dairy Investments Pte Ltd (Singapore), the biggest foreign shareholder of Vinamilk, announced it had bought 5 million more shares, raising its total ownership ratio in the dairy producer to 16.04%.
One month before, the Singaporean institution registered to buy 14.5 million Vinamilk shares on the bourse. However, it stopped the share collection when the price exceeded the VND148,000 per share threshold.
The market conditions were unfavorable, they said. However, opinions from well-informed circles said it did not want to buy more shares because the purchase would push up the share price of the dairy company to a level higher than the price at which the State Capital Investment Corporation (SCIC) sold last year.
The divestment of state capital in 10 state-owned corporations is still in SCIC’s action plan this year. However, the details of the plan have not been revealed.
After falling to VND120,000 per share in late 2016, Vinamilk shares have recovered thanks to the high demand from foreign investors. The share price has peaked at VND152,000 per share since the listing on May 26.
Besides Vinamilk, the State has assigned SCIC to divest from other listed companies such as Bao Minh (insurer), Vinare (re-insurer), Binh Minh Plastics, Tien Phong Plastics and FPT (information technology).
The share prices of all the companies have increased significantly compared with the end of 2016. Meanwhile, the VN Index has climbed to a 9-year peak of 745 points.
It is now time for SCIC to divest shares to withdraw the state’s capital from these companies. As the VN Index has improved, SCIC can set starting prices higher than the initial price levels.
Analysts have all predicted that the VN Index will continue rising, which means that if SCIC delays divestment, it will make fatter profits in the future.
The state management agency is making every effort to have the Vietnamese stock market upgraded from frontier to emerging in order to attract more foreign capital.
Meanwhile, an analyst commented that the State is not divesting shares because the state budget revenue in the first four months was good and the budget is in surplus, not in deficit as seen in the same period in previous years.
