Vietnamese bank debuts on market

Vietnam's stock market has increased in value by almost half, with the listing of its first bank on Wednesday.

Sacombank - or Saigon Commercial Bank - debuted with a market capitalization of almost $1bn, and is by far the biggest company on the exchange.

The listing marks a significant step in the country's economic liberalisation.

The securities market in Ho Chi Minh City is small - just 41 stocks are listed - but with the arrival of Sacombank it is now worth nearly $3bn.

In fact the stock market has been the best performing exchange in Asia this year - up more than 60%.

It is still tightly controlled by the government - foreign investors can own up to 49% of most companies and 30% of banks, and no single investor can hold more than 10%.

There are also tight restrictions on how foreign financial institutions can operate in the country, but all that will change once Vietnam joins the World Trade Organization, which will probably happen later this year.

Global competition

Vietnam's banks are trying to get themselves into shape before the arrival of multi-national competition.

Sacombank has formed a partnership with Australia New Zealand Bank and aims to become Vietnam's biggest retail institution.

To do so it would have to overtake the state-owned commercial banks whose assets are 10 times larger, but are saddled with bad debts.

Vietnam's financial market place is changing rapidly and some of its players are likely to have considerable difficulties over the next few years.

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