The Orient Commercial Joint Stock Bank (OCB) is among the banks still traded on the Over-The-Counter (OTC) market, which is a decentralised and less transparent trading platform. (Source: vietnambiz.vn) Hanoi (VNS/VNA) - Lack ofdisclosed information, listing plans and risks of non-performing loans aredragging OTC-traded bank stocks down.
Seven banks are trading shares on the Over-The-Counter (OTC) market, which isdecentralised and less transparent as it is subject to fewer regulations anddealers can set the prices for buying and selling a security, currency andother financial products.
That already makes shares of those banks riskier and less attractive toinvestors because they are not bound by any regulations regarding informationdisclosure.
The seven banks include the Orient Commercial Joint Stock Bank (OCB), MaritimeCommercial Joint Stock Bank (MSB), Dong A Bank, Bao Viet Commercial Joint StockBank (BaoVietBank) and Viet A Bank.
Among those, only MSB and Việt Á Bank have published their 2019 first-halffinancial reports, which are the references for investors that are keen onpurchasing the bank shares.
Other banks have not updated their quarterly and annual financial reports,annual reports and business profiles.
According to analysts, this is understandable because those banks are notobliged to publicise their financial reports as they are not traded on thethree common stocks markets – which are Ho Chí Minh Stock Exchange (HoSE), HanoiStock Exchange (HNX) and Unlisted Public Company Market (UPCoM).
In addition, investors are unwillingto trade OTC bank shares because banks often miss their listing plans whileputting banks on the common stocks markets is a must-do for the banking sector.
Meanwhile, investors worry about thenon-performing loans (NPL) or bad debt ratios because they have recorded a highgrowth of credit and lending this year, Dien dan Doanh nghiep (EnterpriseNews) newspaper cited individual investor Nguyen Hung as saying.
According to financial-banking specialist Nguyen Tri Hieu, bank stocks have notperformed well lately because the stock market has been struggling withexternal factors from international markets.
OCB shares traded between 14,500 VND (0.62 USD) and 15,200 VND per share onOctober 3. MSB shares ranged between 10,200 VND and 11,100 VND per share, andViet A Bank shares moved between 3,200 VND and 3,800 VND per share.
OTC banks’ trading volume was between 10,000 shares and one million shares onOctober 3.
Meanwhile, trading volume of common bank stocks was maximum 6.14 million shareson October 3. Their share prices were between 7,100 VND and 82,000 VND pershare.
In recent months, bank shares are not an attractive target for investorsbecause they still have some bad assets, NPLs are increasing and unsettled, andother financial indicators are unreliable, Hieu said.
“There are many professional and experienced investors on the market likeinvestment funds, financial firms and lenders, who are very aware of thestrength of the banking sector. When they undervalue bank shares, it means theundervalued banks barely have bright future,” he said./.
VNA
