Irrational gamble by small banks at trading sessions

Bank stocks, small banks, stock market Illustrative photo

Risk of price fall

The stock code SHB of Saigon-Hanoi Commercial Joint Stock Bank has continuously been increasing and now has suddenly soared to VND 28,500 per share in the day sessions from less than VND 16,000 per share in the trading session on 10 March. With an increase of up to 80% in less than a month, SHB not only established a historic peak but also became the focus of GSO during this period.

In these sessions, SHB liquidity pushed up very high, with tens of millions of shares transferred in each session. It was this huge demand that helped SHB to have impressive reversal moments, being traded at a sudden drop at ceiling price, with the order to buy millions of shares pushed up at the same time. For example, on the 26 March session nearly 80 million shares matched, equivalent to VND 1,520 bn.

Previously, more than 1.2 billion shares of SSB or Southeast Asia Commercial Joint Stock Bank, also had a wave of rapid increases of 20% on 24 March on HOSE, from reference price of VND 16,800 per share to VND 20,150 per share. Immediately after that, SSB continued to have a series of increases and surpassed the peak of VND 28,000 per share in the session on 31 March. Thus, after only six sessions, SBB recorded an increase of nearly 70%. Although SSB is just a rookie, SSB liquidity is huge with millions of shares traded per session.

Similarly, BAB or North Asia Commercial Joint Stock Bank, moved to list from UPCoM to HNX at reference price of VND 16,000 per share, and increased by 30% right in the session on 12 March, to VND 20,800 per share. The streak of BAB continued to last for many successive sessions, helping this stock to surpass the level of VND 36,000 per share in the session on 12 March. Thus, within only eight sessions, BAB recorded an increase of approximately 130%.

The increase in sessions of the above two stocks caused missed shareholders to decide to pour in money to collect the banking codes with prices below VND 20,000 per share, equivalent to the starting point of SHB. In the opinion of investors, if SHB and SSB go up to nearly VND 30,000 per share, banks with the same starting point cannot have prices below 2.0 but must have an equivalent price.

With this thought, investors did not hesitate to pour capital into many bank shares. In particular, two banking codes, STB of Saigon Thuong Tin Commercial Joint Stock Bank, and EIB of Vietnam Export-Import Commercial Joint Stock Bank, increased to the limit due to huge demand from investors. On 30 March, STB created a liquidity record with nearly 100 million shares transferred, equivalent to a value of VND 2,000 bn.

Unreasonable increase

The fact that SHB suddenly reached its historical peak surprised the stock market because it seemed to have no information outside of its 2021 business plan, with pre-tax profit growing 70% year-on-year. Meanwhile, SHB is facing risks stemming from too fast capital gains in the past. Since 2015, SHB chartered capital has nearly doubled, from VND 9,486 bn to VND 17,558 bn, of which, in the first three quarters of 2020, SHB issued an additional VND 5,552 bn. Capital scale increased rapidly in a short time, while business efficiency increased slowly, and not commensurate with the net profit margin (NIM) of only about 2.8%, but much lower than the industry average of 3.84%.

Although SHB 2021 profit story is still quite vague, for investors this is easier to understand than the case of STB and EIB. STB received less positive information related to the pledge of STB to secure the loan, with the debt balance likely to lose the capital of nearly VND 1,900 bn. Specifically, KLB has cooperated with customers to handle all collaterals related to their loans to a group of customers with collaterals of 176 million shares of STB. As for EIB, the best news comes from the proposed amendment of the regulations to organize the annual shareholders meeting. EIB is currently the only bank unable to hold the 2020 shareholders meeting due to insufficient attendance.

Investors suspicious

The fact that BAB doubled its price after being listed on the HNX is an unusual and equally mysterious phenomenon. Earlier at the end of 2017, BAB had quietly put 500 million shares to list on UPCoM with a starting price of VND 20,000 per share. BAB listing price surprised investors at that time because it was 1.62 times higher than the book value of VND 12,318 per share, even higher than that of major listed banks at that time. However, despite the suspicions of investors, BAB still increased strongly after being listed, and there was a time when this stock increased to nearly VND 29,000 per share.

Although this rising wave of BAB took place during the time when bank stocks attracted cash flow, it was still questioned by investors because the business activities of BAB were very weak compared to other listed banks. According to the financial statements of 2020, the pre-tax profit of BAB was VND 737 bn, down by 21%. The decrease was mainly due to the sharp increase in the cost of provisioning while the net interest income grew weakly.

Notably, BAB's NPL at the end of 2020 was VND 628 bn, an increase of 25.6% compared to the beginning of the year, and the ratio of NPLs to outstanding loans increased from 0.69% at the end of 2019 to 0.79%. As in the past, the stockholder structure was too condensed and had no major shareholders owning more than 5% of the shares, which was too easy to drive the price of BAB shares.

The rising wave of SSB is also being questioned because the bank shareholder structure is almost similar to BAB. Concentrated shareholder structure is also the reason why SSB liquidity has not increased, especially during ceiling hitting sessions. With this feature, according to analyst forecasts, when the bank waves pass, SSB and BAB will be the first bank stocks to lose liquidity.

On the contrary, investors holding shares of SHB or STB are not too worried about liquidity, but face a huge risk of price decline when stocks enter the adjustment phase. Investors holding SHB shares will not forget the 5 April session. From reference price of VND 27,000 per share, this stock suddenly dropped sharply to floor price of VND 24,300 per share, when the holder suddenly launched an order to sell millions of shares at floor price.

Kim Giang

News Related


Vietnam receives over 17 billion USD in remittances

This represents a rise of nearly 3 per cent over 2019, a very positive result compared to the previous forecast in the context of the COVID-19 pandemic. According to the World Bank, Vietnam… Read more »

Regulation on apartment tax outdated: experts

Advertisements for apartments for lease are stuck on the façade of a building. Owners of apartments for lease will be subject to higher taxes than other service providers – PHOTO: TNO HCMC –… Read more »

Jewellery training now enjoys generous SkillsFuture Funding

SINGAPORE – Media OutReach – 18 May 2021 – As part of a concerted effort by SkillsFuture Singapore, Workforce Singapore, Enterprise Singapore and the Ministry of Trade and Industry, and thanks to the strong support of the… Read more »

MoU inked for enhanced capacity of support industry firms

At the event (Photo: VNA) Hanoi (VNA) – Toyota Motor Vietnam Co., Ltd. and the Ministry of Industry and Trade’s Industry Agency on May 17 signed a memorandum of understanding (MoU) on their… Read more »

Vietnam and Japan tighten partnership

Japan will remain steadfast in boosting diplomatic relations with Vietnam and supporting the country in infrastructure development, especially in the fields of transportation, energy, environment, and space cooperation.  Prime Minister Pham Minh Chinh… Read more »

Vietnam ongoing economic recovery affected by fourth Covid-19 outbreak: WB

Vietnam’s ongoing economic recovery can be negatively affected by the fourth Covid-19 outbreak, started in late April.  Source: World Bank According to the World Bank, the Covid-19 resurgence has led to a sharp… Read more »

Bac Kan launches OCOP e-commerce floor

Screenshot of the e-commerce floor ( Bac Kan (VNA) – Authorities in the northern mountainous province of Bac Kan signed a deal with the Kim Nam Group on May 17 to launch the… Read more »

Swiss-Vietnamese Business Gateway to establish representative board

Ambassador Le Linh Lan speaks at SVBG debut ceremony (Photo: VNA) Geneva (VNA) – The non-profit Swiss-Vietnamese Business Gateway (SVBG) decided at a meeting on May 15 to establish a representative board comprising… Read more »

Gaming laptop sales surge as Covid keeps people home

CellphoneS, which has 48 stores, said sales have been up five times in recent weeks. Prices have risen by 10 percent due to low supply, and are set to rise further, it said.… Read more »

The dilemma of Vietnamese smartphone brands

The latest market exit of a Vietnamese smartphone brand is VinSmart, the smartphone manufacturing unit of Vietnam’s biggest private conglomerate Vingroup. The company announced in a statement earlier this month that it will… Read more »

Binh Dinh gives green light for forming steel plant, int’l port projects

A vessel docks at a seaport. The government of Binh Dinh Province has given the green light for surveying and studying a steel plant and international general port projects in the province’s Phu… Read more »

Steel exports surge 50% despite steel price upsurge

A man works at a steel production plant. Vietnam’s exports of steel and iron increased 50.4% in the first four months of 2021 – PHOTO: VNA HCMC – Vietnam’s exports of steel and… Read more »

Ca Mau builds geographical indication certification for black tiger shrimp

NDO – In order to promote the branding of Ca Mau black tiger shrimp, the provincial Department of Science and Technology has coordinated with the Centre for Sustainable Rural Development to develop a… Read more »

Promoting proactiveness and flexibility in consumption of agricultural products

NDO – Due to the new and complicated developments of the COVID-19 pandemic in the country and the world, the production, business and consumption of agricultural products in many localities continues to face… Read more »

Inflation expected to be reined in for 2021

NDO – In a bid to continue successfully controlling inflation this year amid a rise in local consumption, the government is taking drastic action, with the stabilisation of prices of key items in… Read more »

Most of Vietnam's economic indicators in April were good: WB

NDO – The World Bank Vietnam has announced its updated report on Vietnam Macro Monitoring in May 2021, which states that most of Vietnam’s economic indicators in April were good. However, it warns… Read more »

Stocks retreat on strong sell-off pressure

Employees of a securities firm in HCMC monitor stock prices. The VN-Index of the Hochiminh Stock Exchange lost ground today – PHOTO: THANH HOA HCMC – Many stocks lost ground due to heavy… Read more »

Auto imports from China surge in Jan-Apr

Auto imports from China. CBU car imports from China surged in the January-April period this year – PHOTO: VNA HCMC – Vietnam spent US$247 million importing more than 6,600 completely-built-up (CBU) cars from… Read more »

Binh Dinh gives in-principle approval to urban, eco-tourism project

Binh Dinh gives in-principle approval to urban, eco-tourism project. – Illustrative image (Photo: Binh Dinh (VNA) – The People’s Committee of the south-central coastal province of Binh Dinh has given in-principle approval… Read more »

VN-Index dragged down by Masan, Vinamilk tickers

The index rose by up to 11 points in the morning but started gradually falling during the rest of the day to close with a near 8-point drop. Trading value on the Ho… Read more »

Hyundai recalls cars to replace faulty anti-lock brake fuse

Out of the defective vehicles, 20,374 were locally assembled between August 2017 and December 2020, while the rest were imported between July 2015 and May 2020. Drivers of the recalled cars could have… Read more »

Finance ministry urges transparency in budget allocation for Covid-19 fight

Provinces/cities are urged to stay active in allocating their provincial budget and other legal financial means to aid the Covid-19 fight, ensuring efficiency and transparency during the process.  Covid-19 testing in Hanoi. Photo:… Read more »

Binh Dinh mulls steel mill, port complex project

At a steel mill (Illustrative photo: VNA) Binh Dinh (VNA) – The Chairman of the People’s Committee of the south-central coastal province of Binh Dinh has approved the conduct of a feasibility study… Read more »

Trend Micro Launches First and Only SecOps Solution to Slay Open Source Code Bugs

Built with Snyk, this Trend Micro Cloud One service saves time per vulnerability and improves visibility and tracking automation HONG KONG SAR – Media OutReach – 17 May 2021 – Trend Micro Incorporated (TYO: 4704;… Read more »

HCMC to spend VND8 trillion more on anti-flooding projects

A motorcyclist wades through a heavily flooded street in HCMC after heavy rain. HCMC has plans to kick off 12 anti-flooding projects worth over VND8 trillion this year – PHOTO: VNA HCMC –… Read more »

Vietnam’s 2021 import-export revenue expected to reach $600 bln

The bright trade signal came after Vietnam’s success in fighting the COVID-19 pandemic, said Tran Thanh Hai, Deputy General Director of the Agency of Foreign Trade under the Ministry of Industry and Trade.… Read more »

Land bubble drives investors into despairs

Now, just a few people from other places came to ask to buy land in Tan Loi Commune in Hon Quan District. The owner of a beverage shop said that more than 2… Read more »

Vietnam earns US$362 million from rice exports in April

This brought the total volume of rice exported in the first four months of this year to 1.9 million tons, worth $1.01 billion, down 10.8 percent in volume but up 1.2 percent in… Read more »

Central province seeks approval for $27-bln LNG project by US firm

It includes an LNG plant, a dock and warehouses to be built by U.S. company Millennium Energy, it said in its proposal to the government. They will be built in the south of… Read more »

Domestic consumption, exports of steel surge

Exports hit 2.1 million tons and local sales, 9.84 million tons, according to data from the Vietnam Steel Association (VSA). Steel production rose 38 percent year-on-year to 10.48 million tons, enough to fully… Read more »

Vietnam s rice exporters urged to utilize FTAs to boost shipments

Vietnamese rice exporters have been urged to play a more active role in utilizing free trade agreements (FTAs) to which Vietnam is a party to boost falling exports. Philippines becomes Vietnam’s largest rice… Read more »

Vinhomes eyes 24 pct profit jump

Major housing projects that would fetch revenues include Vinhomes Ocean Park and Vinhomes Smart City in Hanoi and Vinhomes Grand Park in Ho Chi Minh City, the company said in a statement. The… Read more »

Landlords await tenants as empty space increases

With retail spaces finding it hard to attract tenants, landlords are banking on foreign investors expanding chains – PHOTO: THANH TAO HCMC – As a result of the ongoing Covid-19 pandemic, the rental… Read more »

Vietnam s cassava exports enjoy surge in first four months of 2021

Exports of cassava and cassava-based products were estimated to be worth $443 million in the first four months of the year, a year-on-year increase of 23.9 percent, according to the Agro Processing and… Read more »

Vietnam earns 362 million USD from rice exports in April

Bags of rice loaded onto a ship for export. (Photo: VNA) Hanoi (VNS/VNA) – The volume of rice exported last month is estimated at 700,000 tonnes with a value of 362 million USD.… Read more »

Gov’t seeks to allow HCMC to retain 23% budget revenue, up from current 18%

HCM City is the country’s economic powerhouse with a significant GDP contribution to the national budget, Vietnam News Agency cited PM Chinh. Professor Tran Hoang Ngan, director of the HCM City Development Research Institute,… Read more »

Industrial production up 10 percent in first four months of 2021

Vietnam’s national index of industrial production advanced 10 percent year on year in the first four months of this year, according to the country’s General Statistics Office. Mo tả ảnh Read more »

Vingroup targets 54 percent revenue growth

It targets post-tax profit of VND4.5 trillion in 2021, approximately the same as last year. It plans to boost its business activities in all its core sectors of technology, industry and services this… Read more »

Reference exchange rate down by 16 VND at week’s beginning

The State Bank of Vietnam set the daily reference exchange rate at 23,160 VND per USD on May 17 (Photo: VNA) Hanoi (VNA) – The State Bank of Vietnam set the daily reference exchange rate at 23,160… Read more »

Cloud Comrade Brings Patented Advanced Data Security Solution to Asia-Pacific Customers

SINGAPORE – Media OutReach – 17 May 2021 – Singapore-headquartered cloud consulting company Cloud Comrade is onboarding a next-generation cloud-native data security technology that will be available in Singapore and the Asia-Pacific region… Read more »

Companies worried about hiring foreign experts under new academic strictures

South Korean electronics giant Samsung, one of the largest foreign direct investors in Vietnam, is worried that the new decree will pose challenges for its recruitment process. “In reality, there are many people… Read more »

South Korean firms prefer Hanoi to HCMC for office lease

In the event, they lease 60 percent more office space in Hanoi than HCMC, they study by real estate consultancy Savills found. For Japanese businesses, the ratio is roughly equal, indicating that they… Read more »

Industrial production up 10% in first four months of 2021

VNA Read more »

Hyundai Thanh Cong Vietnam to recall over 23,000 faulty cars nationwide

A South Korean – Vietnamese joint venture has announced its recall of more than 23,000 Hyundai Tucson cars in Vietnam for free replacement of anti-lock brake fuses. A total of 23,587 cars of… Read more »

US pork producers seek to penetrate deep into Vietnam market

The National Pork Producers Council of the US is seeking to diversify its pork export markets, and Vietnam is one of its targets. More than 70 US lawmakers led by Representatives Ron Kind… Read more »

Hyundai Thanh Cong recalls 23,578 Tucson cars for software update

Hyundai Tucson is one of the favourite crossover models in the world. (Photo: VNA) Hanoi (VNA) – Hyundai Thanh Cong Commercial Vehicle (HTCV), a joint venture between the Vietnamese Thanh Cong Group and the… Read more »

Hanoi and neighbouring provinces seek approval on plan to build fourth ring road

An intersection on Hanoi’s third ring road NDO – Hanoi and the provinces of Hung Yen, Bac Ninh, Bac Giang and Vinh Phuc have submitted a proposal to the Prime Minister requesting the… Read more »

HCMC to make access to ports easier

Heavy traffic on Dong Van Cong Street leading to ports in Cat Lai area in Thu Duc City – PHOTO: THANH HOA Import-export activities through the system of seaports are vital to HCMC’s… Read more »

Investors warned about risks of real estate corporate bonds

Corporate bond investors will likely face huge losses when the real estate market is still growing in hot trend, forming the high risk of a “bubble” in Vietnam. The warning has been given… Read more »

Why foreign investors maintained the trust in Vietnam?

Vietnam – A safe destination for development of foreign direct investment. The FDI sector has become an important driver of the country’s economic growth. Visit Vietnam Insider’s homepage for more stories. Foreign investors… Read more »