Hanoi (VNS/VNA) - Issuance value of corporate bonds in Vietnamreached a five-year high of 39.45 trillion VND (1.7 billion USD) in 2018, datafrom Bao Viet Securities Co (BVSC) showed.

The total value of additional shares issued,initial public offerings (IPOs) and corporate bonds hit 83 trillion VND (3.56billion USD), its highest level since 2014.

IPO value also hit a five-year peak of 21.94trillion VND (942 million USD), eight times higher than the value recorded in2017. However, the value of additional shares issued was just 21.76trillion VND (934 million USD), the lowest level since 2014.

In its report on opportunities in Vietnam’s stock market in 2019, BVSChighlighted investment opportunities on the Unlisted Public Company Market(UPCoM), where many equitised State-owned companies are trading shares.

The current market capitalisation of the entire UPCoM is 910 trillion VND (39billion USD), of which the 20 largest stocks account for 70 percent.

The biggest companies include Airports Corporation of Vietnam (ACV), Vietnam Engineand Agricultural Machinery Corporation (VEA), Vietnam Airlines (HVN), PV Oil(OIL), Vietnam International Bank (VIB), FPT Telecom (FOX) and Quang Ngai Sugar(QNS), each with a market capitalisation of between 11 trillion VND (472million USD) and 186 trillion VND (8 billion  USD).

Opportunities may also come from divestment of State capital. ACV, VEA, HVN, VietnamNational Textile & Garment Group (VGT) and Vietnam Pharmaceutical Corp(DVN) on the UPCoM; Petrolimex on the HSX; and construction materialsmanufacturer Viglacera (VGC) on the Hanoi Stock Exchange all have plans to sellmore State capital in 2019.

Importantly, changes on the foreign ownership ceiling for public companies inthe Draft Amended Securities Law may bring benefits for foreign investors byremoving the requirement to seek shareholder approval for extending foreign ownershipin the company to 100 percent.

This change is expected to make it easier for Vietnam’s companies to qualifyfor MSCI’s emerging market index.

However, BVSC warned that Vietnam’s stockmarket may struggle to attract more new foreign capital compared to 2016-17 dueto increasing cost of capital after many central banks tightened monetarypolicies.

In the latter half of this year, if Vietnam fulfills criteria to qualify for areclassification, new speculative foreign capital flows may enter the Vietnamesestock market.-VNS/VNA