Investment
Foreign investment funds suffer from stock market slump
The performance of foreign investment funds in Vietnam’s stock market has been pessimistic in the past two months due to the slump of the market.
VN-Index on the Ho Chi Minh Stock Exchange has dropped by some 18 percent in the past two months, closing last week at 963.9 points against its highest record of 1,204 points on April 9 this year.
Due to the drop, the net asset value (NAV) of Pyn Elite Fund, which is one of the biggest investment fund in Vietnam’s stock markets, as of May 15 fell 0.2 per cent against early this year to 315.82 euros.
As of May 15, the Finland fund’s total assets reached 436 million euros (US$510 million) with 100 percent of its portfolio being Vietnam’s shares, of which Mobile World Group (MWG) accounted for the largest proportion of 13 percent, followed by Tien Phong Commercial Joint Stock Bank (TPB) with 8.5 percent.
Investments causing the biggest losses for the fund included MWG with a loss of 11.4 million euros, Ho Chi Minh City Infrastructure Investment JSC (CII) with 4 million euros, Tasco JSC (HUT) with 3.81 million euros, Hoa Binh Construction Group JSC (HBC) with 3.2 million euros and Nam Kim Steel Joint Stock Company (NKG) with 2.49 million.
Meanwhile, profitable shares were PAN Group (PAN), which earned the fund 10.1 million euros since the beginning of this year, followed by TPBank and Khang Dien House Trading and Investment JSC (KDH), each gaining over six million euros.
According to Pyn Elite Fund, Vietnamese shares are trading at low prices compared to other ASEAN countries, with the average price-to-book (PB) ratio of 1.4 and the price-earnings (P/E) ratio of 17.
The story is much the same at other funds of leading investment management companies such as Dragon Capital and VinaCapital.
Vietnam Enterprise Investment Limited (VEIL), the biggest fund under the management of Dragon Capital, recorded its yearly profit of just 6.94 per cent with NAV of over $1.66 billion as of May 17.
This number was much lower than the 19 per cent growth seen on April 5, which meant the fund lost over 12 per cent of its profit since the start of the year.
VEIL’s investments focused on large-cap stocks such as Military Bank (MBB), Asia Commercial Bank (ACB), MWG, Vinamilk (VNM), PV Gas (GAS), Hoa Phat Group (HPG) and FPT Corp (FPT), which have all plunged in the recent downtrend.
ACB and MBB, two of the three stocks which made up the highest proportion of the fund’s portfolio, slumped 14.9 per cent and 17.1 per cent, respectively in the past month. MWG decreased only 4 per cent in one month but has lost 21 per cent since the beginning of the year.
Meanwhile, VinaCapital Vietnam Opportunity Fund (VOF) witnessed a monthly decrease of 5.7 per cent by the end of April, reaching more than $1.12 billion. It was a bad result compared with a three-month profit of 11.2 per cent by March-end.
According to VinaCapital, the market downtrend in the past months may stem from profit taking led by institutional investors, after the VN-Index gained 22 per cent in the first quarter and peaked at 1,204 in early April.
Nevertheless, market fundamentals remain solid with strong earnings growth and long-term economic growth driven by resilient consumer confidence – the current market correction poses an opportunity for selective buying, according to the fund’s market commentary released last week.
It also noted the possible impact of US-China trade war, general outflow from emerging markets by global investors due to the stronger US dollar and higher long-term rates on the Vietnamese securities market.
Due to the drop, the net asset value (NAV) of Pyn Elite Fund, which is one of the biggest investment fund in Vietnam’s stock markets, as of May 15 fell 0.2 per cent against early this year to 315.82 euros.
Pyn Elite Fund made a loss of 11.4 million euros from investment in MWG shares
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Investments causing the biggest losses for the fund included MWG with a loss of 11.4 million euros, Ho Chi Minh City Infrastructure Investment JSC (CII) with 4 million euros, Tasco JSC (HUT) with 3.81 million euros, Hoa Binh Construction Group JSC (HBC) with 3.2 million euros and Nam Kim Steel Joint Stock Company (NKG) with 2.49 million.
Meanwhile, profitable shares were PAN Group (PAN), which earned the fund 10.1 million euros since the beginning of this year, followed by TPBank and Khang Dien House Trading and Investment JSC (KDH), each gaining over six million euros.
According to Pyn Elite Fund, Vietnamese shares are trading at low prices compared to other ASEAN countries, with the average price-to-book (PB) ratio of 1.4 and the price-earnings (P/E) ratio of 17.
The story is much the same at other funds of leading investment management companies such as Dragon Capital and VinaCapital.
Vietnam Enterprise Investment Limited (VEIL), the biggest fund under the management of Dragon Capital, recorded its yearly profit of just 6.94 per cent with NAV of over $1.66 billion as of May 17.
This number was much lower than the 19 per cent growth seen on April 5, which meant the fund lost over 12 per cent of its profit since the start of the year.
VEIL’s investments focused on large-cap stocks such as Military Bank (MBB), Asia Commercial Bank (ACB), MWG, Vinamilk (VNM), PV Gas (GAS), Hoa Phat Group (HPG) and FPT Corp (FPT), which have all plunged in the recent downtrend.
ACB and MBB, two of the three stocks which made up the highest proportion of the fund’s portfolio, slumped 14.9 per cent and 17.1 per cent, respectively in the past month. MWG decreased only 4 per cent in one month but has lost 21 per cent since the beginning of the year.
Meanwhile, VinaCapital Vietnam Opportunity Fund (VOF) witnessed a monthly decrease of 5.7 per cent by the end of April, reaching more than $1.12 billion. It was a bad result compared with a three-month profit of 11.2 per cent by March-end.
According to VinaCapital, the market downtrend in the past months may stem from profit taking led by institutional investors, after the VN-Index gained 22 per cent in the first quarter and peaked at 1,204 in early April.
Nevertheless, market fundamentals remain solid with strong earnings growth and long-term economic growth driven by resilient consumer confidence – the current market correction poses an opportunity for selective buying, according to the fund’s market commentary released last week.
It also noted the possible impact of US-China trade war, general outflow from emerging markets by global investors due to the stronger US dollar and higher long-term rates on the Vietnamese securities market.
