Vinacapital Vietnam Oppo... Share Discussion Threads

[dickbush] 20/12/2009 00:23

Skyship
The shares ARE at circa 30% discount to NAV. The NAV is less volatile than the Vietnam Index because of its unquoted holdings. However, its underlying NAV is probably about the same. I get the feeling that because of the fund's very large size that the managers are well connected and get good deals on holdings in government owned companies well before they come public. So the fund should outperform the index over the long run.

[tenapen] 19/12/2009 14:28

SKYSHIP,
I have investments in India but i am excited about the opportunities that Africa as a continent offers. With its low wages and large land mass and most of it fertile land with good rainfall. I read that Saudi Arabia among others are buying 99yr leases on land to produce 'their own food' as i read again that food security will be most important in the coming years. Africa also as minerals a plenty and IMO it is underneath most investors radar and in the fullness of time, now could be seen as the start of a 'new dawn'. It will not be the first time that as been used in resect to Africa only for it to fall back into corruption and failure.

Please DYOR

Good luck in 2010, All

[skyship] 16/12/2009 08:55

Moneyweek alerted me to this one; whilst the Inv. Manager of Credit Suisse (interviewed on Bloomberg this morning) stressed the need for emerging market cover in 2010 due to the imbalance in global economic performance, esp the Far East v. Europe.

Why does MW suggest a 31% NAV discount compared to the declared figure which shows we are trading at NAV, or perhaps now at a premium due to the recent continuing fall in the Viet market? Is there perhaps clear evidence of more value in the unquoted portfolio...

Whilst I'm about it - any views on other non-China emerging nations to buy into? Am contemplating India...

[strollingmolby] 14/12/2009 22:45

Shame they can't put the direct link in the RNS !

[dickbush] 14/12/2009 14:49

End-November NAV $2.40. Market down 9% since.

[strollingmolby] 13/12/2009 13:46

Vietnam: a rocky ride, but good value long-term

But the overall story remains compelling: Vietnam has a young population, a 90% literacy rate, cheaper labour than China and a wide range of raw material exports. And on 13 times next year's expected earnings, the market looks good value for investors who can stomach near-term volatility.

Deutsche Bank offers a London-listed ETF tracking Vietnamese stocks (XVTD), while the Aim-listed Vietnam Opportunity Fund (VOF) is on a 31% discount to its net asset value.

[dickbush] 11/12/2009 09:44

Market at 444.

[dickbush] 09/12/2009 09:19

Market at 470, down 25% from its peak in October.

[investinggarden] 08/12/2009 17:08

What Investment feature: Investing in Vietnam

[roman2325] 02/12/2009 08:41

Just to add: I agree wholeheartedly these remain a great investment and sorely under-valued at the moment..

[roman2325] 02/12/2009 08:40

"Strategic Buy" - Really sticking his neck out!

[kamitora] 02/12/2009 01:49

VinaCapital Vietnam Opportunities IT
1.425p +0.075
Questor says BUY

As the global economy rises and exports increase, the Vietnamese economy should bounce back. Although pressures on the dong remain, the long-term Vietnam story is intact. Shares in VinaCapital Vietnam Opportunities Investment Trust remain a strategic buy.

[dickbush] 27/11/2009 18:26

Another (Vietnamese) view.


State Bank of Vietnam's drastic policy measures

Yesterday (25 November 2009) was a big day for the State Bank of Vietnam (SBV), as they announced a raft of policy measures designed to combat perceived emerging macroeconomic imbalances. Already for the last several weeks the SBV has been devaluing the VND/USD base rate used as the reference rate for official forex traders, albeit at a crawling pace, to signal to the market its intention to change from a growth to exchange rate management policy. The policy was not yielding the desired results to bring the black market exchange rate inline with the official exchange rate, and thus the SBV yesterday announced three drastic policy measures:
·A one off VND devaluation of roughly 5.4% in the VND/USD reference rate from 17,034 to 17,961 effective on 26 November 2009, combined with a reduction in the official forex trading band over the reference rate from ±5% to ±3
·A 1% base rate hike from 7% to 8% effective on 1 December 2009
·Potential mandatory purchases of USD from State-Owned Enterprises (SOEs) and other exporters

The VND devaluation serves two primary purposes. First, it is a signal that the SBV is moving towards a more free floating currency regime as the new rate should theoretically allow the official forex traders to come inline with rates in the black market easing USD demand concerns. Second, devaluing the VND will help ease potential balance of payment issues as the trade deficit in October is estimated to have reached nearly USD 2bn.

The interest rate hike is an effort to ease (reduce) credit growth, which stood at 33% ytd through October, 3% higher than the Governments full year 30% target. High credit growth, increasing commodities prices, and base effects led to an increase in the YoY inflation rate from 3% in October to 4.4% in November, and the Government does not intend to make the mistake of allowing runaway inflation again.

While hard data is not available, it is generally believed that Vietnamese companies, particularly exporters, are often guilty of hoarding USD, undermining confidence in the local currency. The third measure (if more than just rhetoric) will get tough on SOEs thus improving USD liquidity and alleviating forex concerns.

The market reacted negatively to the news, being virtually limit down on Wednesday. However, the initial consensus view is applauding the SBVs aggressive action, and although a short term market correction is to be expected, in the long term the actions put Vietnam on a much more sustainable growth path.

In line with the consensus view, we see the policy response as highly beneficial to the long term return potential of Vietnamese equities. The double headed inflation/trade deficit problem is one that needs to be permanently addressed in order to eliminate the biggest threat to Vietnams high growth story. Historically, the SBV has used patchwork policy responses to address emerging imbalances, and our opinion is that the current proactive response is necessary for the long term health of Vietnams economy.

The market correction, in such panic mode, means great value is emerging in Vietnamese equities. It must be noted that Vietnam is still in the midst of a strong economic recovery, and the fund will continue to invest in companies that are levered to that growth. Thus, the fund will continue to target domestic plays, in companies that continue to be the primary beneficiaries of the Vietnam growth story. Furthermore, there will be an added emphasis on export companies who will now see their profit margins improve as their costs have been reduced in relative terms due to the Dong devaluation.

Our view on current investment potential

One reminder is that investing in Vietnam should always be done with a long term view, and in that sense, our opinion is that potential for high market returns in the long term has improved as a result of the 25 November policy measures. In the next week or two, it is likely the market will continue to correct, which will give us ample opportunity to use up its large cash balance to enter into good companies at increasingly attractive valuations.

The final word is this: we should be willing to accept a short term sacrifice in market returns as a result of the SBV actions as long as it improves long term return potential, and the current response really demonstrates a maturing SBV, one that looks increasingly likely to lead Vietnams high growth AND sustainable growth path moving forward.

[dickbush] 27/11/2009 09:41

Mobius, the Emerging Markets guru has come out today and suggested that NOW the Vietnamese market could fall 15%. I met him not long before the sh*t hit the fan in 1997 and he was still bullish as hell. As far as I can see he's much like your average stockbroker ie always bullish except AFTER the roof has already fallen in. The market ranged between 460 and 500 today and actually closed up at 490.

I have a reasonable sized holding but I'm keen to build it up. The discount to nav must be 35% plus. A 15% decline in the market and the shares and I'll be long a load more.

[dickbush] 26/11/2009 08:12

Market down 4% today to 482, down 18% since the end of last month, and down 23% since its peak of just over a month ago. Panic starting?

[dickbush] 25/11/2009 11:13

Vietnam announced a 5% devaluation of the currency, the Dong, versus the US$ and an interest rate rise from 7% to 8% in December. Inflation has bottomed out and the latest was up over 4% y/y. The Fund's NAV should drop 5% in Dollar terms. No one should be surprised that inflation is rising. I think the Vietnamese were forecasting 7% by year-end.

I'm a believer in Vietnam for the long term but, like all developing nations, they haven't yet appreciated the value of aiming for low inflation and consequent low interest rates. As the government is a big fan of what the Singapore government has achieved over the last 50 years, I'd expect them to get there one day, but probably not until they've learnt the hard way. Meanwhile you have real economic growth of high single figures to look forward to, and, one day, a high rating of the corporate sector's earnings.

I have no idea if this is the right price to enter. I'm a buyer again about 20% down from here.

[roman2325] 25/11/2009 08:18

Hi - any thoughts on short-term prospects for this? No favours from the Central Bank overnight yet hoping this has a floor at $1.50 and this is merely a decent buying opportunity..

[dickbush] 09/11/2009 09:12

No. Can be bought in a SIPP-unless you are with Hargreaves Lansdown.

[bones30] 04/11/2009 09:18

Is this ISA-able?

[dickbush] 03/11/2009 09:31

roman, if this is even part of the reason for Vietnam's decline (down another 4% today), then it just shows what a young market it is. No one has a "third eye" for the future, particularly not a broker. "If you want to make a small fortune in the stockmarket, give a stockbroker a large fortune".

[davebowler] 02/11/2009 09:53

I have held ASPL for a few monnths now, I'm glad to say but intend to hold til the discount is removed and the underlying property values rise- so could be for a year or two I imagine.

[dickbush] 02/11/2009 09:15

Main market down to 561.7. Local broker looking for a 20% decline from peak i.e. back to 500. A broker calling the market down?