Brian Jeffrey
Vietnam’s stock market is facing challenges due to low liquidity and decreasing interest, leading to a noticeable trend of stock acquisitions by families of company executives. What’s the current situation in Vietnam’s capital market?
Recent reports indicate a significant uptick in share purchases by relatives of corporate leaders:
· Masan Group (MSN): Nguyen Yen Linh, daughter of billionaire chairman Nguyen Dang Quang, invested around 600 billion VND to purchase 8.5 million shares from October 29 to November 18. This raised her ownership to 0.59%. This acquisition occurred as MSN shares fell from over 81,000 VND to below 70,000 VND in recent months, down from a peak of 140,000 VND per share at the end of 2021.
· 911 Group (NO1): Nguyen Thi Hai, spouse of chairman Luu Dinh Tuan, acquired 763,500 shares between October 15 and November 13, increasing her stake to 7.28%.
· TNG Investment and Trading JSC (TNG): CEO Nguyen Duc Manh has signaled plans to buy 1 million shares in December, which would up his stake to 8.01%.
· HIPT Group JSC (HIG): Chairman Le Hai Doan registered to purchase 1 million shares, which would boost his shareholding to 47%.
· Lam Son Sugar JSC (LSS): Chairman Le Van Tan plans to buy 500,000 shares, following Vice Chairman Le Trung Thanh’s acquisition of 2.65 million shares in October.
· Vinhomes (VHM): The company has repurchased nearly 247 million shares valued at 10.7 trillion VND, achieving 66.75% of its initial repurchase goal.
· Vietnam International Bank (VIB): Dang Thi Thu Ha, wife of vice chairman Dang Van Son, registered to acquire 10 million shares, while their daughter intends to purchase 4 million shares.
· HDBank (HDB): CEO Pham Quoc Thanh is poised to buy 1 million shares, potentially increasing his ownership to 0.199%.
This surge in buying activity comes alongside a sluggish market, marked by low liquidity and ongoing declines. Analysts propose several reasons behind this move:
1. Company-Specific Developments:
NO1 Group: Plans to expand, including acquiring VinFast vehicles for a taxi operation.
Masan Group: A revival in retail and consumer sectors, along with potential partnerships with foreign investors like South Korea’s SK Group.
VIB: Anticipation of divestment by Commonwealth Bank of Australia.
Vinhomes: Stock repurchases potentially in response to undervaluation or foreign selling pressure.
2. Long-Term Confidence:
Executives and their families may choose to buy during downturns to affirm belief in their company’s future.
3. Market Opportunities:
The current low prices and weak market sentiment may offer promising buying prospects for long-term investors.
The issues plaguing the stock market include:
Foreign Outflows: Year-to-date net outflows total 85 trillion VND, propelled by a strong USD/VND exchange rate and increased global interest rates.
Domestic Constraints: Margin lending has reached a record high of 9.2 billion USD, juxtaposed with daily trading volumes of only 10–15 trillion VND.
Debt Pressures: Numerous companies are managing bond repayments due by the end of 2024.
Despite these hurdles, some analysts are optimistic that the current downturn may represent the market’s nadir. Although an immediate recovery seems unlikely, this period could provide attractive buying opportunities for long-term investors, particularly in companies with solid strategies and promising growth prospects.
