SCIC (State Capital Investment Corporation) Asset Sales to Include Sale of Vinamilk FPT and BMP stakes amongst others

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Public debt burden rising and is now close to 65% of GDP ceiling

October 2015

After the market closed the media ran some articles related to the implications of the just agreed SCIC restructuring plan. On 8 October, the Deputy PM Vu Van Ninh has signed document No. 1787 regarding the restructuring plan for the SCIC.

Key holdings such as VNM will be sold in due course – According to the document, SCIC will choose a suitable time to liquidate their stakes in 8 listed companies including VNM (45.1%); BMI (50.7%); VNR (40.4%); NTP (37.1%); BMP (38.4%); FPT (6%); SGC (49.9%); HGM (46.6%) and two unlisted companies including FPT Telecom (50.2%) and Vietnam Infrastructure Investment & Development Company – VIID (47.6%). However, SCIC will not sell stake in other 9 companies consisting of some listed names such as BVH, TRA, DHG and DMC.

HSC Comment – This is a major breakthrough in terms of providing access to foreign investors to popular blue chips such as VNM & FPT. Although we will have to await (1) a clear timetable; (2) whether the proposed work-around of the definition of foreign owned company/investors for stock market trading as proposed in draft Circular 74 is accepted; and (3) clarification of the updated non-restricted list in due course. The motive for this is related to the current very tight fiscal environment whereby the government may be planning to use asset sales to help fund future infrastructure and development investment. The market will no doubt welcome the news as the lack of availability of key stocks has been a major hindrance to attract larger funds into the market.

These submissions are extracted from reports accomplished by Ho Chi Minh City Securities Corporation (HSC)’s Research Division team led by Fiachra Mac Cana, Managing Director, Head of Research

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