Vinacapital Vietnam Oppo... Share Discussion Threads

[dickbush] 24/5/2021 22:20

I use this source for infections in Vietnam



Through the 24th there is little sign of getting control. Note that this is my largest holding. So, I'm not a knocker, just stating the facts. I was pleasantly surprised, given the infection numbers, by the good market today. I'll be very happy if it continues. I'll be even happier when these numbers show a downtrend in the 7-day infections.

[amt] 21/5/2021 07:43

Another strong day for the stock market.
Vietnam doing remarkeably well to control latest Covid outbreak.

[exotic] 17/5/2021 16:41

A second death announced.

[31337 c0d3r] 17/5/2021 10:35

WHO Covid site showing the first Vietnam death in over 8 months, and a bit of a jump to 276 new cases.

[spangle93] 17/5/2021 09:35

April monthly summary shortcut



Comments on recent CoVid outbreak, as discussed here

VOF delivered a 7.7% return for April, and calendar year-to-date the NAV is up 14.0% (USD, total return basis). The key contributors to the portfolio’s performance this month were from HPG (HOSE: HPG, +24% m-o-m), Eximbank (HOSE: EIB, +36.7% m-o-m), Khang Dien House (HOSE: KDH, +15.6% m-o-m), and Phu Nhuan Jewelry (HOSE: PNJ, +16.1% m-o-m

Outperformed VN Index over last month, but in line over 3 months

[hpcg] 16/5/2021 19:17

lageraemia - no I'm fairly sure not. I think there is only the US listed Van Eck ETF VNM and the index that follows this index: which includes non-Vietnam listed companies that do most of their business in Vietnam. I haven't looked at the prospectus for the ETF itself so I don't know whether it soft closes or uses synthetic products.

[lageraemia] 15/5/2021 13:46

This isn't a passive tracker, so management are choosing not to simply buy the shares of companies not already at the limit of the foreign ownership threshold.

However, would buying the shares of Index tracker funds circumvent that?

[dpmcq] 15/5/2021 13:43

Whilst agreeing with the maths and explanations regarding the buy-backs, my own view is that the share price is also a reflection of the current supply/demand for the underling share and as such by doing a Buy-back the Trust are also becoming another purchaser in the market and this would help to tip the balance back toward the demand for the share and either stem the fall or help turn it positive and increase the current share price and so narrow the discount to NAV.

[shaker44] 15/5/2021 12:22

No. It's often better to use funds to buy in at a discount than feel pressured to invest where the case is not Rock solid. I tend to view buy ins as positive

[spangle93] 15/5/2021 11:57

Doesn't share buy-backs indicate that the company is running out of ideas for where to invest its capital, and thus it's a sign of growth slowing? I'd rather capital was employed - next they will be wanting to raise money by issuing more shares...

kenmitch - your shopping bargain analogue is true to a point, but lacks the critical tenet that with shares, we hope to sell on for a gain, which is possible even if you've "overpaid" (e.g. renewables) when the premium grows even larger

[hpcg] 15/5/2021 09:04

One of the attractions of any of the Vietnam ITs is the stocks are up to their foreign ownership limit and thus deploying money is not easy. Buy backs are all ok in my book as part of a balanced use of money with some going into unlisted investments and some back as dividend.

[donald pond] 15/5/2021 08:06

Buy backs should in theory also reduce the discount by increasing demand for shares. But think it through with a real example. A company with 1,000 shares, a NAV of £1 per share and a share price of 90p. They buy back 100 shares for £90 and there are now 900 shares in issue but the NAV of the company has dropped from £1,000 to £910. So the NAV per share is, all else being equal, 101.1p. If the share price is still 90p, that should encourage discount hunters.

[shaker44] 15/5/2021 02:44

Thank you. I get the math now but over time the share price is likely to eat that marginal difference in my view. Higher NAV, fewer shares, more attractive to buyers, holders less likely to sell

[lageraemia] 14/5/2021 21:38

Buy back increase the NAV PER SHARE not the NAV, which they technically decrease as less cash is on the books.

Therefore, if shares are trading at a discount, buy back increase the discount of share to the NAV unless they increase the share price by a greater proportion because the value of the assets backed by a share is greater than reduction in the value of the cash no longer on the books included as part of the NAV.

Its marginal, but its true.

[kenmitch] 14/5/2021 12:53

Buybacks INCREASE NAV. Buybacks themselves don't increase or decrease the discount. The discount will widen or narrow on investor selling or buying. Investment Trust Managers hope that the discount will narrow when spending significant sums buying back.

A lot of investors like buybacks so the fact that a Trust is buying back can tempt some to buy the shares. But as explained in the previous post I much prefer that money to be used to buy good value investments. Do that consistently as VOF have and the share price will go up a lot. A LOT has to be spent on buybacks to get just a very small increase in NAV as a result of them.

I much prefer buying a Trust at a big discount to one at a premium. Why pay more than it is worth? It's the same when shopping; we look for bargains and not for goods that we know are over valued!

[exotic] 14/5/2021 12:16

I don't think it's optional; I remember reading they've obligated themselves to spend a proportion of management fees on buybacks.

[shaker44] 14/5/2021 11:47

Surely not? Help me with the Math on that one please.

[lageraemia] 14/5/2021 09:07

Buy backs do also increase the discount when the shares are bought back at a discount.

[kenmitch] 14/5/2021 08:46

I would rather spare cash was used for good choice investments that do far more for NAV than buybacks. Trust Managers sometimes worry too much about their Trust being at a wide discount, instead of realising that its an attraction for potential new buyers. AND if, as is the case for VOF, performance is consistently good, and/or general sentiment towards Vietnam improves, there is often a narrowing of the discount and even a move to a premium anyway.

Discounts are one of THE big attractions of Investment Trusts. We can sometimes buy them for far less than they are worth. And if performance is good there’s often the double plus of a riding share price being given an extra boost with a narrowing of the discount at the same time.

Look at Black Rock World Mining (and other Mining Trusts like BERI and CYN) as examples. As investor sentiment on mining sector turned very bullish the discounts even went to a premium AND the share prices have sometimes tripled in a few months.

So imo best to let the NAV to look after itself and not waste valuable cash trying to reduce it artificially via buybacks.

[amt] 14/5/2021 08:07

Vietnam up again.
I bought some VNH which has a 20% plus discount

[dickbush] 13/5/2021 10:49

US futures declined again in the last hour of Vietnam market trading. Down 0.6% is still pretty good considering what happened to other Far East markets. I have the discount about the same as yesterday. Obviously, the discount again reached the level at which the managers were happy to buy in.

[lageraemia] 13/5/2021 09:08

Discount widened despite share buy back......

[amt] 13/5/2021 06:19

More big falls in Asia overnight but Vietnam market continues upwards.
I note the discount has widened so perhaps a rise is on the cards today.

[amt] 12/5/2021 11:25

Yes, very strong finish.

[shaker44] 12/5/2021 09:44

Vnh is even greater discount at 22.5%.
Both will improve as VN economic strength becomes more widely understood. Not so many good homes for cash just now.