VOF has a property and financials bias. Hopefully Eximbank's 54% rise in Q4 profit to around $130m bodes well for other financials that VOF might hold. Also, it's plans to further expand into the north of Vietnam bode well.
Despite expected US tariffs, the Vietnamese government still targets growth at 8%+ in 2025 and 10%+ in 2026. |
 VNI up slightly again today. It's not up much but it appears to have broken and backtested a minor downtrend going back to last summer, setting it up to have a go at major horizontal resistance stretching back 3 years that is less than 2% above its current level.
Midcaps/HNX have broken a similar but less minor downtrend going back to early summer. Resistance there is less horizontal and more of another longer 3-year downtrend, with the next target then about 6% higher.
Ditto unlisteds with next target 3% higher.
These are short-term positive charting developments and possibly consistent with smaller companies looking a bit livelier, compared to large caps, which is what tends to happen in bull markets, but there are still clear longer term resistances to get through before any fireworks.
I don't know if locals that drive these markets are into charting/TA but I do know there's been lots of local media articles citing a very positive economic outlook, strong profit growth and low share ratings just lately. |
Freedom Superficially everything looks great for Vietnam but the market has been going nowhere for ages, well before Trump. Infact for 4 years while most other markets have been booming.
What is really odd is that company profits have been forecast to grow 20% per annum. The market goes nowhere but the overall pe doesn't fall.
It's a mystery but I suspect corruption may be the issue.
So it's not a no brainer by any means, just to give balance.
I have an investment but reduced it a lot from a year ago.
Foreigners seem to be net sellers nearly everyday. |
Been looking to buy here, but unsure on Trump's stance on Vietnam. Anyone got a view?Seems such a country with an awful lot going for it. |
VOF's yield is around 2.7%.
I've read that tariffs could actually acclerate transfer of US imports from other countries to Vietnam, though it very much depends how they interact with each other. If you push prices up a little, not much changes. If you push prices up a bit more, interest rates rise, economies slow, and struggling companies look harder for cost savings and cheaper sourcing that might need more admininstration rather than just taking an easy option of pressuring an existing supplier. Tougher times make the cost saving effort and disruption of shopping around more worthwhile. Vietnam could benefit - a bit like Aldi and Lidl do well when UK shoppers find money is tighter after tax rises.
With Vietnamese total exports up almost 15% last year, and expected to be up over 10% this year, growth is rapid enough that curtailing US exports a little with tariffs is not probably going to make a great deal of difference to Vietnam's overall growth trajectory in an accelerating Asian economy, expecially when you consider that exports shipped to the US will probably either find an indirect route to get there at a slightly higher price, or just be redirected to other markets. Media tend to react simplisticly to tariff threats as if they will stop the relevant exports. In practice, this rarely happens as alternative paths or markets are found. Media are already speculating that the UK will get electric cars currently destined for the USA on the back of Chinese tariffs - so do US tariffs on Chinese electric vehicles stop them being exported? No. Will US consumers have to pay more for electric cars? Yes. Will US rates rise? Maybe. Who is the winner and loser here? It's not as clear as initial media reports are making out. |
Another interesting point is that VNH were buying back shares at a discount, but when they turned the share price into a premium they were issuing new shares. |
This fund is on a discount as it is not an income fund and doesn't pay you to wait, whilst Trump could easily put the knockers on the cheap labour, employment conditions and manufacturing this region provides, that the USA cannot possibly match. |
There was a large proxy vote for that in Dec 2023 - no direct vote offered so it went through as a significant discontinuation vote - but the board still disagreed after, and then VNH went and did it and it worked for them.
I say worked but it still resulted in asset sales that shrank the fund and possibly pushed down the prices of its (and maybe some of VOF's) underlying holdings. It seems as much a part of the foreign selling of Vietnamese shares as our buy-backs that don't seem to be working to shrink the discount.
IGC greatly shrank a very large discount in 2020 with a tender but the discount has returned modestly at points and further tenders and buy-backs have shrunk the asset base of the fund, obscured by strong market returns. Had it not sold shares and shrunk its asset base, would the fund be larger and the discount have shrunk naturally in the Indian bull market? We can only guess.
The whole thing seems to split opinions. I look at all the ITs selling assets to buy their own shares back and wonder how they they think selling off their asset base can be good for the industry. Individually, in moderation, it makes some sense. Collectively, in large quantities, it's suicidal.
Companies meddling with their own share prices was illegal until the 80s and there is a move to have buy-backs made illegal again in the US. |
Perhaps VOF (and VEIL) need a redemption facility similar to what VNH introduced to eliminate their discount?
"The introduction of a redemption opportunity at NAV less associated costs (the first of which is on 30 September this year) appears to have been behind a significant narrowing of VNH’s discount so that a 25.7% NAV return translated into a 48.2% share price return over the 12 month period ended 31 May 2024." |
Most recent reporting has been dropping the March or September suggestion for Emerging Market Status in favour of just September. That's not so far away and the rest still looks good. Given a 10-year average trailing P/E of over 15, the Vietnamese market would need to rise 50% over the next year to get back to an average rating.
(VOF exposure would probably see NAV rise slightly more than the overall market. Now imagine if NAV went up 60% and the discount closed from 25%+ to 5-10%. There's potential for VOF shares to double in short time when optimism returns. But what and when is the catalyst?)
We think key catalysts supporting Vietnam’s stock market include:
Projected GDP growth of 7.4% in 2025, reinforcing Vietnam’s robust economic trajectory.
Earnings growth expectations for Vietnam’s Top 100 stocks at 18.2% for 2025, which puts the VN-Index’s forward P/E at 10.2x, remaining attractive compared to Thailand (14.5x) and Malaysia (13.6x).
A potential upgrade to a FTSE Emerging Market status in September 2025, which could attract significant foreign capital inflows.
Opportunities from the State’s divestment of assets to finance ambitious public spending plans, supporting economic expansion and infrastructure development. |
@Aleman
Agreed, everything looks very promising, so why is this trust on such a discount?
It does seem odd... |
Despite continued foreign selling on Vietnamese stock exchanges (VOF buy-backs?) , VNI is once again eyeing recent highs that could see it break out. Meanwhile, FDI got off to a flying start in January.
More than 4.33 billion USD in foreign investment was registered in Vietnam in January, an increase of 48.6% compared to the same period last year.
Strong wages, strong retail sales, strong FDI, ,strong exports, booming tourism and strong corporate profits must push stock indices up into new territory soon , surely ....?
The number of international arrivals to Vietnam in January reached nearly 2.1 million, a month-on-month surge of 18.5% and a year-on-year increase of 36.9%, the General Statistics Office announced on February 6. |
Vietnamese government encouraging private sector to invest and grow faster to meet GDP targets and roll out infrastructure needs:
The private sector contributes about 60% of Vietnam’s GDP, 98% of total export turnover, and employs about 85% of the country's workforce, according to the Ministry of Planning and Investment.
To achieve double-digit GDP growth, the private sector needs to grow by around 11% annually, it said. |
Discount is very tempting. Best value asian trust out there at the moment, especially after AAS discount has begun to narrow. |
I just topped up again today, almost on a 26% discount it is just too tempting... |
Unlisted stocks have got excited and are up about 2.5% this week. VOF have a lot of unlisteds but the weaker Dong this week has taken the edge off. It should be encouraging the locals who drive the Vietnamese markets and smallcaps leading large caps is usually an early sign of a bull market.
Discount here is 25.3% at 458p but the markets are up again today. VNI is a 4-month high and Unlisted market is at a 7-month high. It just highlights how far VOF is falling behind the markets and its own NAV. When it turns, it could fly. |
Vietnamese Retail Sales rose 9.5% between Jan 2024 and Jan 2025 - equal highest monthly annual rise since November 2023, and arguably equal highest in 5 years if you ignore Covid distortions. Dong fell from 24400 to 25200 over the last year - slightly over 3%.
So retail sales would up about an annual 6% or so in $ terms, and seem consistent with hittng strong GDP forecasts for this year. |
Vietnamese indices just closed up for a third consecutive day, though currency movements have taken the edge off as far as VOF is concerned. VNI has justed edged through a slightly falling resistance line that does not look of particular note but HNX/midcaps have also been strong lately and clearly broken out of a down trend dating back to mid-June. That one does look significant to anyone with a charting bent. Unlisted smallcaps (like our AIM) have risen sharply since mid-January, to 6-month highs. Could it be a precurser to entry into the FTSE Emerging Market Index in March (though September seems favourite)? The recent strong rises look like a possible change of sentiment, especially since small caps are leading the way and volume has increased a bit on the back of a large number of positive local media assessments of the coming year's stockmarket prospects in recent days.
The rises this week are despite continued foreign selling. If foreigners would just stop selling, these markets look like they would fly and break out to new 3-year highs. As it is, they've been very perky either side of their New Year break, despite concerns over Trump Tariff effects. |
The HNX midcaps closed up 1.4% today. HNX is on the cusp of breaking out of an 8-month downtrend. There is a slightly muddier 8-month downtrend in VNI that would only now take a small rise of about 1% to break.
The equivalent downtrend in VOF was steeper, as the discount expanded, so that has now already broken as it shrank back slightly at new year, though we are now seeing it expanding again. This leaves the downtrend and any break thereof a bit less clear.
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However, the NAV trend however is much more positive. That downtrend from June broke in December and has been in an unptrend since late November until this weekend's wobble. It now looks to be deciding which way to turn. Go back slightly further and it looks very positive over 2+ years - a steady bull since Nov 2022 with a couple of corrections, including last October, that are starting to look less prominent as the bull extends. It's only been expansion of the VOF discount that has stopped it from following a similar 2+ year bull trend. Any further rise in NAV this week could see June's NAV peak taken out, making the VOF share price look unusually laggardly. |
Despite heavy foreign selling yesterday, VNI fell less than 1% so was among the lesser falls in Asia. Yesterday's discount to NAV was back up to an excessive 25.0% and Vietnamese markets have today largely recovered so it will likely be higher. One does get the feeling Vietnamese markets would rise to medium term highs if foreigners would just stop selling. |
VNI finished the week well, ahead of the Tet holiday. VOF shares have not responded much to what is likely to be a short-term high for NAV. It's got all next week to catch up now. |
Herald shareholders rejected the SABA proposal so I would think it will cost them if they have to sell their holding |
Tet holiday next week. |
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