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Techcombank shows Vietnam’s valuation gap

It had the right strategy, the right management and the right customers, so why couldn’t Techcombank and its advisers get the right price on its recent IPO?


Techcombank’s southern headquarters is in Ho Chi Minh City

The listing of Techcombank in June was one of the most closely watched events in Vietnam’s recent history.

It seemed to show the whole country taking a step forward in market sophistication. Here was a bank with a management team full of international expertise, with ex-Morgan Stanley, McKinsey and Wells Fargo staff throughout the ranks. It is also one that has attracted world-class anchor investors, including GIC, Warburg Pincus and Fidelity.

And then the deal dropped 20% on its first day of trading.

Why? Global markets didn’t help. But at the heart of it is a gap between how institutional investors – entranced by the bank and the exposure to Vietnam’s demographic story – and retail investors see the markets, as well as some lingering weirdness in Vietnam capital markets regulation.

The bank’s management – which has suffered far more pressing crises than this – says it is not concerned and that true value will eventually be reflected, not only in the bank but in the country’s markets. But it is also a salutary lesson in how Vietnam has perhaps the region’s most unpredictable markets.

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