Outside the headquarter of Petrosetco in HCM City. — Photo petrosetco.com.vn
As the broader market undergoes corrections, stocks connected to divestment initiatives are showing notable resilience and even upward momentum.
Recent announcements of share auctions at state owned enterprises have triggered a series of positive performances, turning these stocks into bright spots on trading screens.
A prominent example is the stock of Thuong Dinh Footwear JSC (GTD), which recorded four consecutive days of gains, reaching VND 19,800 (approximately USD 0.75) per share on Monday. The surge followed an announcement by the Hanoi People’s Committee to auction more than 6.38 million shares, equal to 68.67 per cent of the company’s capital.
Similarly, VTC Telecommunications’ stock (VTC) rose sharply, hitting the ceiling price of VND 11,800. It marked the fourth straight limit up session after Vietnam Post and Telecommunications Group (VNPT) said it would auction more than 2.1 million shares, or 46.67 per cent of its issued capital. With a total reserve price of VND 104.1 billion, the auction indicates a significant premium over current trading levels.
A similar trend appeared in the stock of VMG Media JSC (ABC), which surged after VNPT announced a plan to sell 5.77 million shares, representing 28.3 per cent of its equity, at a starting price well above the market rate.
Another notable case occurred on November 10, when Petrosetco shares (PET) spiked immediately after PetroVietnam confirmed plans to auction more than 24.9 million shares, equal to 23.2 per cent of its charter capital, at a reserve price of VND 36,500.
ICT shares of the Joint Stock Company for Telecom and Informatics also climbed more than 30 per cent within five trading sessions in early November, following VNPT’s announcement of a major auction, further underscoring how divestment news is shaping stock movements.
Challenges and risks
Despite the optimism surrounding these announcements, caution remains essential.
Retail investors often push prices higher on expectations of strategic investors entering or company revaluations. However, risks arise if auctions are delayed, fail, or attract weak interest, potentially leading to sharp reversals.
Even successful divestments may prompt extended adjustment periods, particularly if new owners lack expertise or if companies’ competitive advantages weaken.
Stocks with significant state ownership but low liquidity also pose risks for retail investors, who may face difficulties exiting positions once market enthusiasm fades.
Meanwhile, the complexity of state divestment procedures can introduce obstacles, including valuation issues or reserve prices set above prevailing market levels, deterring institutional investors.
Overall, while Vietnam’s divestment wave offers promising opportunities, investors should approach with insight and prudence. Stocks drawing attention for their divestment potential often see heightened trading volumes, typically through large transactions at above market prices. Still, careful assessment of each company remains crucial to identifying genuine growth prospects and making informed investment decisions.
