Vingroup's Vinpearl lists amid tariff hit to Vietnam IPOs
[HANOI] A wave of optimism that buoyed Vietnam's stock market in the first quarter of 2025 is fading fast as a harsh US tariff blow derails fundraising plans and stalls initial public offering (IPO) momentum, with hopeful aspirants now eyeing a potential rebound by year-end.
Several high-profile listings on the Ho Chi Minh City Stock Exchange (HoSE) this year, including Masan Consumer and Techcombank Securities, are now on hold until the last quarter of this year, with issuers citing the impact of US reciprocal levies of up to 46 per cent on Vietnam and volatile market conditions.
'Our IPO is tentatively planned for the end of this year. However, the exact timing will depend on financial market conditions, the impact of (US) reciprocal tariffs, and the pace of Vietnam's stock market upgrade,' Ho Hung Anh, chairman of Vietnamese private lender Techcombank, parent of the brokerage firm Techcombank Securities, said at last month's shareholder meeting in Hanoi.
Investor sentiment took a hit in April, with the benchmark VNIndex sliding 6.2 per cent month on month, wiping out earlier gains. The index, which gained 4 per cent by the end of March, slipped to a year-to-date loss of 3.2 per cent by Apr 29, before rebounding to a 1.3 per cent gain on May 12.
Before the latest headwinds, several Vietnamese companies had already taken key preparatory steps, signalling a potentially more vibrant listing market in 2025 after a prolonged slowdown that saw just one IPO in 2024.
Across South-east Asia, the IPO market was also sluggish last year with 136 IPOs versus 163 in the preceding year, based on a Deloitte report.
A NEWSLETTER FOR YOU
Friday, 8.30 am Asean Business
Business insights centering on South-east Asia's fast-growing economies.
Sign Up
Sign Up
On Jan 17, Binh Son Refining and Petrochemical – majority owned by state oil firm PetroVietnam – transitioned from the secondary Unlisted Public Company Market (UPCoM) to the HoSE. The company operates the US$3 billion Dung Quat Refinery, the country's second-largest oil refinery.
Momentum continued in February with HoSE-listed Becamex IDC announcing plans for a share issuance worth 20.88 trillion dong (S$1 billion) on Apr 28. However, roughly two weeks after US President Donald Trump announced his tariff tantrum, the state-backed industrial park developer decided to push back the share sale to a time it deems 'more suitable'.
Meanwhile, in March, Masan Consumer shareholders approved the delisting of the company's shares from UPCoM to prepare for a blockbuster public listing on HoSE. The ownership of a major shareholder was also adjusted to meet the requirements for the move.
However, due to volatile global market conditions, the IPO of the consumer goods subsidiary of Vietnamese retail giant Masan Group is reportedly being pushed to the fourth quarter instead of the second quarter as earlier announced.
'The market is currently a lot more challenging,' said Michael Hung Nguyen, deputy chief executive at Masan Group, during a conference in Hanoi on Apr 22. 'You don't want to be the only guy going to the market… We would like to see other peers making the market more active for us.'
Vinpearl appears to be leading the charge.
On May 13, the hospitality arm of Vietnam's largest private conglomerate Vingroup, became the first major listing in the wake of the tariff-driven turbulence. It floated 1.8 billion shares on HoSE, bringing its market capitalisation to nearly as high as 153 trillion dong in the first trading session.
The stock offering followed a successful rights issue in February, during which the firm raised more than five trillion dong.
Turning point
Market observers anticipate a turning point in Vietnam's IPO landscape by late 2025 amid the government's push to bolster the private sector and strengthen the domestic economy to mitigate external shocks.
'A key driver of the anticipated rebound is firms' urgent demand for capital,' said Tyler Nguyen, chief market strategist at Ho Chi Minh City Securities Corporation. 'We also expect improved approval processes and a stronger institutional focus on facilitating capital market access.'
However, Nguyen said an unfavourable trade deal with the US could weaken investor sentiment in Vietnam, potentially delaying IPO timelines or complicating the book-building process.
'The strength of any IPO recovery will heavily depend on the outcome of ongoing trade negotiations between Vietnam and the US,' he added.
In light of this context, an increasing number of companies, including commercial lenders VietABank, BVBank, Saigonbank, and Kienlongbank, have announced plans to upgrade from UPCoM to the country's main bourses in the latter half of this year.
'This strategic transition marks a significant advancement in corporate governance maturity, strengthens brand visibility, and signals these companies' readiness to capitalise on anticipated increases in capital inflows,' said Bui Van Trinh, transactions accounting support partner at Deloitte Vietnam.
'Looking ahead, sectors likely to lead the IPO recovery include financial services and, in the long run, technology – all aligned with Vietnam's broader shift up the value chain,' he added.
Upside for startup listings
At the other end of the spectrum, local tech startups are eagerly awaiting positive developments as Vietnam is actively exploring a specialised secondary bourse within its planned International Financial Centres (IFC) in Ho Chi Minh City and Da Nang.
This aims to enable high-growth companies to raise funds through public listings based on revenue potential or innovation capacity rather than profitability, which is currently a key criterion for domestic IPO.
The proposed board would introduce simplified disclosure requirements, tech-specific valuation metrics, and streamlined post-listing obligations, as part of broader IFC initiatives to attract investment and improve market liquidity, including a pilot crypto exchange.
However, experts warned of existing challenges, including domestic investors' limited understanding of pre-profit valuations, immature risk assessment frameworks, and the need for stronger legal protections for public shareholders.
Chris Milliken, a partner at Baker McKenzie, noted that foreign investors may face obstacles when investing in Vietnamese companies of various sizes and stages due to certain unfamiliar local regulations. These include foreign ownership limits, sector-specific licensing requirements, and transaction practices that differ from international norms.
'Investing in Vietnam certainly involves some careful upfront thinking and strategising both about the incoming investment and also about a future exit,' he said. 'If foreign investors can see that there are meaningful and compelling pathways to exit investments in Vietnam through capital markets, then more foreign investors will want to invest.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
3 hours ago
- Straits Times
US seeks deal in London on China rare earth flows, says Trump's economic advisor
White House economic adviser Kevin Hassett said China's exports of critical minerals have fallen short of what was previously agreed. PHOTO: REUTERS WASHINGTON – US negotiators will aim to restore the flow of critical minerals when they meet their Chinese counterparts for a new round of trade negotiations on June 9 in London, a top economic aide to President Donald Trump said. 'Those exports of critical minerals have been getting released at a rate that is, you know, higher than it was but not as high as we believe we agreed to in Geneva,' Mr Kevin Hassett, director of the National Economic Council, said on June 8 during an interview on CBS News' Face the Nation with Margaret Brennan. Rare earth flows became a new flashpoint in the testy bilateral relations in recent weeks. Top US officials including Trade Representative Jamieson Greer accused Beijing of failing to comply with the elements of the trade agreement brokered in May in Geneva by slowing down and choking off critical minerals needed for cutting-edge electronics. Mr Trump on June 6 described talks with China as 'very far advanced' and said that Mr Xi Jinping agreed to speed shipments of the critical rare-earth minerals. China said on June 7 it approved some applications for rare earth exports but didn't elaborate on the products' applications or destinations. 'I'm very comfortable that this deal is about to be closed,' Mr Hassett told CBS, without elaborating on the exact terms to be negotiated by the two sides during the London talks. 'We want the rare earths, the magnets that are crucial for cellphones and everything else, to flow just as they did before the beginning of April,' he said. 'We don't want any technical details slowing that down.' BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
6 hours ago
- Business Times
Chinese managers take reins at TikTok Shop in US as sales miss goal
[SEATTLE] ByteDance, TikTok's parent company, has been replacing US-hired staff near Seattle with managers connected to China, aiming to replicate its e-commerce success in Asia after sales fell short in America. TikTok Shop initially set a goal to increase its US e-commerce business tenfold last year to US$17.5 billion in transaction volume, but had to drastically lower that objective, according to people familiar with the plan who spoke on the condition of anonymity because they were not authorised to talk publicly. TikTok established its Shop business in the Seattle area near the online retail giant it was aiming to displace. Meetings that used to be held in English are now often conducted in Mandarin and managers increasingly write in Chinese when communicating on Feishu, ByteDance's internal Slack-like app, with English-speaking staff forced to rely on the built-in translation function. 'We continually assess our business needs and have made recent team adjustments to strengthen our organisation, remaining confident in the future ahead,' a TikTok Shop spokesperson said. The company previously called the reported e-commerce transaction target 'inaccurate.' More than 100 TikTok Shop employees in the US have been fired or have left amid confusion between leaders that has worsened the work environment, according to people familiar with the company. The cultural transition taking place in the firm coincides with its fight for survival in the US – due mainly to the app's Chinese ties. A national security law passed by Congress last year requires TikTok's US business to be spun off from its Chinese parent company or it will face a ban. Lawmakers warned that TikTok's ties to China pose a threat to the safety and security of American users. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up President Donald Trump has twice delayed the ban – with legal assurances from his attorney general – and another deadline for divestiture looms later this month, though that might also be extended, the Wall Street Journal reported. ByteDance said during the Biden administration that it had no plan to sell TikTok, but in April the Beijing-based company confirmed that it had been in discussions with the Trump government regarding a potential solution for TikTok US. It said any agreement would be subject to approval under Chinese law. The TikTok Shop near Seattle in February began requiring workers to be in the office five days a week for eight hours a day, according to a memo reviewed by Bloomberg. The change is in contrast to some other major tech companies that still offer flexible work schedules, and has been particularly burdensome for employees who often join late-night calls with colleagues in Asia after they leave the office, according to former employees. US-based staff require human resources and manager pre-approval to work from home. The changes were introduced after Bob Kang, China-based global head of TikTok's e-commerce division, visited the office in Bellevue, Washington, earlier this year and found there weren't enough staff present on a work day, according to multiple people who spoke on the condition of anonymity for fear of retaliation. Assigning Chinese executives to run TikTok's fastest-growing business may raise questions about its previous corporate promise to distance the US operation from China. After Trump initially tried to ban the app during his first term, the company announced a security plan dubbed 'Project Texas' and vowed to wall off the app's US data and operations from any Chinese oversight. TikTok Shop is the biggest source of revenue for the video-sharing app besides advertising, and it has become a major investment area for ByteDance. Adding full-scale commerce to its eye-catching content and popular influencers sets it apart from rivals like Instagram and YouTube. The company still aims to challenge Amazon in major markets. Recruited aggressively To better compete, TikTok Shop recruited aggressively near Seattle over the past three years, targeting people with experience at Amazon, according to a review of Linkedin profiles and people who worked at both companies. In some corners of TikTok's Bellevue office of about 1,000 employees, the workflow felt like a remix of previous Amazon teams, the people said. But since January, growing tension in the teams below Kang and Nico Le Bourgeois, who oversaw TikTok's e-commerce operations in the US, became a distraction for staff who were often unsure about whose orders to follow, the people said. TikTok's uncertain fate in the US also weighed on morale. The company carried out a round of layoffs in April. A second batch followed in May. In the first round, Le Bourgeois was demoted when Mu Qing, a Chinese executive from ByteDance's e-commerce platform Douyin moved to the Seattle area to run TikTok Shop in the US. After the second bout, Mu sent an internal message saying Le Bourgeois was leaving to pursue other opportunities, according to a copy of the message seen by Bloomberg. Those cuts were intended to improve TikTok's 'efficiency,' according to former employees, though it wasn't clear to staff what factors contributed to a worker's efficiency rating. With these changes, ByteDance leaders are bringing in people who are familiar with what worked for the company in China, where Douyin, its TikTok clone for the Chinese market, has evolved into a US$490 billion shopping phenomenon. In addition to Mu, who was the head of Douyin's e-commerce, six other leaders with Chinese backgrounds were appointed in April, according to a different internal memo from Kang viewed by Bloomberg. Possible ban One challenge is that habits of many American users trend towards passive TikTok scrolling as opposed to making purchases in the app. Some US sellers told Bloomberg that they have also been reluctant to invest in the platform, given the possible ban. The final tally for the US e-commerce business's 2024 sales came in at around US$9 billion, according to an estimate by Singapore-based consultancy Momentum Works. TikTok Shop's US struggles have not halted the company's global shopping ambitions. ByteDance in 2021 rolled out e-commerce services in countries including Indonesia, Vietnam and the UK. In South-east Asia, it's already the region's biggest shopping platform after Shopee, according to Momentum Works. Last year, TikTok Shop opened in five countries in Europe, including Germany and Spain. The Europe expansion was delayed because the company first prioritised US growth, Bloomberg reported. This is a crucial month for TikTok in the US. The company will host merchants and creators in Los Angeles next week for a summit featuring some of the new leaders of the e-commerce unit. The current deadline for ByteDance to sell the TikTok's US operation is June 19 and there have been several interested suitors. The company came close to a possible spinoff in April to a consortium of investors that included Oracle, but the deal was scuttled in part because of Trump's trade war with China. Meanwhile, the churn of e-commerce employment continues in the Seattle area. Current and former TikTok Shop employees told Bloomberg that they get hounded by recruiting messages from Temu, another Chinese e-commerce competitor. BLOOMBERG
Business Times
8 hours ago
- Business Times
US companies delay impact reports with DEI, ESG under attack
IT WAS just over a year ago when Nike's then CEO, John Donahoe, trumpeted a flashy 90-second video, hyping a report about the company's efforts to improve diversity and equality. The report, he said in a LinkedIn post, is 'a testament to our belief in the transformative power of sport'. Nike had released some version of it since at least 2001, often with similar fanfare. But this year, the company won't publish that report. Nike joins a growing list of companies that includes JPMorgan Chase, Constellation Brands and Akamai Technologies that are either cancelling or delaying publication of their so-called sustainability or corporate impact reports for shareholders. While companies aren't legally obliged to disclose such information, most S&P 500 members did so in 2024. For more than a decade, this is usually the time period when companies tout the steps they're taking to lower carbon emissions and improve the diversity, equity and inclusion (DEI) of their businesses. Opposition to these reports first surfaced about three years ago when GOP lawmakers and activists began pressing companies to scale back such efforts. And some companies have reacted by taking steps such as scrubbing ESG (environmental, social and governance) and DEI-related words from public documents. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up Anti-DEI movement The election of President Donald Trump has further empowered the anti-DEI movement. During his first week in the White House, he signed executive orders ending federal diversity programs and restricting gender definition to two sexes – male and female. None of the companies contacted said Trump's actions changed their planning for releasing sustainability reports. 'The consequences of reported information are much greater now than they were a decade ago,' said Martin Whittaker, chief executive officer of Just Capital, noting that both progressive and conservative activists are searching for evidence of companies' missteps. He estimates that about 25 per cent of sustainability-related corporate reporting is behind schedule this year. Here are some of the S&P 500 companies that have yet to publish sustainability reports, according to researchers at DiversIQ. Nike, JPMorgan, Constellation Brands and Akamai Technologies have different explanations for why their sustainability reports haven't been published this year. Nike said in an e-mail that it still plans to share the work it's doing to create a more inclusive and sustainable world for athletes in other formats and that its commitment to diversity goals for 2025 hasn't changed. In a regulatory filing, JPMorgan said it plans to release a consolidated report on ESG and climate topics later this year. However, the bank added that it will 'monitor the evolving disclosure landscape as we iterate on our approach to disclosure'. JPMorgan published its '2024 Climate Report' in November. At Constellation Brands, a spokesperson said the timing of the publication's release was adjusted after receiving 'stakeholder feedback', and that the next report is scheduled to be issued next month. Cloud computing and cybersecurity company Akamai said its data-centre vendors were partly to blame for a delay in publication until the end of this quarter. The company wasn't more specific. For the past several years, Pfizer had published an impact report by April. When contacted last week about the delay in publication, a company spokesperson said the timing was adjusted to 'allow for necessary internal processes in preparation for evolving global ESG reporting requirements'. The company released its report this week. The lack of information is a blow, even if temporary, to corporate transparency. Many shareholders rely on the disclosures to gauge how serious companies are about addressing ESG issues, inequities in the workforce, and other factors that can impact the short and long-term value of their investments. Activist investors who've pressed companies to release more data on DEI and climate initiatives have been willing to cut companies some slack this year, given the heightened scrutiny from the Trump administration. At risk Andrew Behar, CEO of As You Sow, which supports social responsibility, said executives have been asking him privately for some flexibility in what information they release this year. 'We told them to not put themselves at risk right now,' he said. 'That isn't good for anyone.' And the caution is warranted, said GianCarlo Canaparo, senior legal fellow at the Heritage Foundation, a conservative think tank that has warned against possible discrimination in company DEI programmes. Corporate leaders are aware that Trump has asked agency heads to identify nine companies or organisations that should be investigated for possible illegal DEI activities, he said. So far, the names haven't been made public, but it's clearly on companies' radar, he added. 'If you have been using race preferences, you really want to make sure you don't get caught,' Canaparo said. 'And if you haven't, you want to make sure you aren't dragged into litigation to explore whether you have.' BLOOMBERG
