VietNamNet Bridge – The financial market has been seething in recent days with information about the merger and acquisition deals of banks. Who are the biggest beneficiaries from the rumors?
In late 2011, right after the State Bank initiated a bank restructure process, opinions from the well informed circle said about the merger of three banks Ficombank, Tin Nghia Bank and SCB. The information was then verified by the decision by the State Bank to approve the plan on merging the three banks.
In early 2012, people whispered in each other’s ears--the news that Eximbank was collecting shares in an attempt to swallow Sacombank. This was a shocking piece of news because Sacombank is one of the biggest banks now in Vietnam. The State Bank of Vietnam then raised its voice that the conclusion should not be made until the news is checked. However, local newspapers which have quoted their different sources, have confirmed the news.
Just several days ago, the finance market once again vibrated with the news about the attempt of SHB to take over Habubank. Meanwhile, Habubank has sent a press release to local newspapers, denying the information.
The market got more burning as the involved parties gave different information. A local newspaper quoted its reliable sources as saying that the deal of SHB buying Habubank has nearly completed after it got the nod from the central bank, and that the expected conversion ratio is 1.34 Habubank shares for one SHB share. The local newspaper affirmed that the two banks signed an agreement on the merger of Habubank into SHB, while the two sides were under the technical negotiations on the valuation of Habubank;
Meanwhile, Vietcombank Securities Company, which is believed to act as the consultant in the affair, has declined to give any information relating to the matter.
SHB has also raised its voice over the issue. However, local newspapers have not found anything new from the statement of SHB. The bank has not denied the purchase of Habubank, while saying that it is seeking the opportunities to merge some banks into it.
Meanwhile, the State Bank of Vietnam, in a statement released on March 13, said that to date, it has not received any report on the SHB’s proposal to buy Habubank. Therefore, it said that the information appeared on mass media is untrue.
Commenting about the moves of the relating parties, analysts said that the involved parties are trying to “use a smoke screen” to distract people’s attention.
It’s clear that the rumors have had big impacts on the stock market and the prices of the shares of listed companies.
Habubank’s shares, for example, once witnessed continued price increases, with the price jumping from 4000 dong per share on January 9 to nearly 7400 dong on March 8. However, right after the rumor about the takeover by SHB, the share prices dropped sharply, which then led to the sharp fall of the Hanoi Stock Exchange Index.
“These are just the rumors, but they create a fertile land for the speculation,” said Le Tham Duong from the HCM City Banking University, adding that the rumored deal of the Da Nang Plastics merging into Binh Minh Plastics was a typical example.
The information about the takeover of Eximbank over Sacombank led to the sharp increases of Sacombank shares, from 11,600 dong to 22,300 dong on March 14.
Duong said that a lot of people can benefit from the rumors. Manager of a securities company believes that the person who most benefits from the affair is a group of shareholders. If their plan can be fulfilled, they would convert a part of the shares into money to settle their private financial problems.
Meanwhile, Le Trong Nhi, a well known finance expert, has warned that the rumors would badly affect the economic security. The rumor about some banks to be merged into others may lead to the fact that people would rush to the bank to withdraw their money.