Saturday, January 5, 2008

Buy more than just their beer

Vietnam’s largest brewer, state-owned Saigon Beer Alcohol Beverage, aims to raise at least $557m by selling a 20 per cent stake in an initial public offering that would value the company at about $2.7 billion.

Sabeco, which brews Saigon Beer and Beer 333, says its business will grow an average of 10 per cent a year for the next decade, and is aiming to double its beer production to 1 billion litres a year by 2010. It is likely to face tough competition in the beer market, which is drawing increased interest from foreign interests now forging joint ventures with other state companies to establish a toehold.

Vietnam's stock market, however, is not as rich as its beer counterpart these days. After rising 144 per cent in 2006, the Ho Chi Minh City stock exchange ended 2007 with just a 23 per cent increase amid concerns about a glut of new shares entering the still relatively small market.

Maybe the Ho Chi Minh City stock exchange needs something to quench it's thirst and help build the local appetite for new stock offerings. Maybe they just need to have a few more pints of Saigon.

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