Vinacapital Vietnam Oppo... Share Discussion Threads

[jimbox1] 19/2/2024 13:31

VNH to bid for VOF would be a neat solution.

[aleman] 19/2/2024 13:13

New buyers of VNH this morning were paying 374p for a NAV just announced at 379p. Will it keep going up until it trades at a premium? One would imagine VNH short and VOF long could end up a textbook example of a pairs trade in time.

[hpcg] 19/2/2024 12:39

If it enters the MSCI Emerging market index then any ETF tracking that index will have to have an allocation of some sort.

[the air marshall] 19/2/2024 12:35

I hold VEIL and VOF. I read that the Vietnam Prime Minister(?) has told his people to aim for a change of category from Frontier to Emerging in 2025! I've also been told that some funds which are unable to hold Frontier shares currently are going to be OBLIGED to buy any new Emerging denominated products. I don't have the research capability to find out which funds these are. Can anybody help?

[kenmitch] 19/2/2024 12:35

arja.

There is nothing “strange”; about VOF. It (like VNH and VEIL) is a standard Investment Trust.

[kenmitch] 19/2/2024 12:24

VOF has been a fabulous investment. I’ve held it almost from the start except for temporarily selling during the 2008 banking crisis and the 2020 covid crash. Have a look at the long term chart. It has 9 bagged from the lows.

The recent underperformance looks a great buy opportunity as VOF has way underperformed VNH and VEIL this year for no obvious reason.

I posted why VOF looks a very tempting buy now on subscription site Stockopedia and to save time have copied part of it below. There is one error in it which a poster there pointed out. The discount has been even bigger than the current 24% in the distant past, when the attractions of investing in Vietnam were even less recognised by UK investors. When eventually UK investors DO wake up to the Vietnam opportunity (perhaps not until Vietnam gets official Emerging Markets status) it’s likely that VNH, VOF and VEIL will do very well and the present discounts could well go to premiums to put an additional rocket under their share prices. BUT right now it’s VOF that looks the one to go for. Here’s that extract arguing why:-

“Why is VinaCapital Vietnam Opportunity Fund (LON:VOF) THE stunning buy now?

1. The main Vietnam index is up 11% so far this year. VinaCapital Vietnam Opportunity Fund (LON:VOF) NAV is also UP 29p since January 2nd from £5.55 then to £5.84p today.

BUT despite that NAV gain the share price is DOWN from £4.55 on Jan 2nd to £4.42. AND the discount to NAV is now exceptionally wide at 24%!!

So the share price fall this year is NOT because of poor performance. It’s mainly because the discount to NAV has widened even further.

I can’t recall in years of holding VinaCapital Vietnam Opportunity Fund (LON:VOF) the discount to NAV being SO high! If VOF was an open ended fund investors would have to pay the full £5.84 NAV price. Instead they (you?) can buy it at a bargain discount price of “25% off” £4.42p.

2. In contrast the other 2 Vietnam Trust share prices have done much better this year and unlike VinaCapital Vietnam Opportunity Fund (LON:VOF) have gone UP since Jan 2nd.

Vietnam Enterprise Investments (LON:VEIL) £5.87 now and up from £5.55 on Jan 2nd. NAV is up from £6.80 on Jan 2nd to £7.21 now. The discount is 18%.

VietNam Holding (LON:VNH) £3.75p and well up from Jan 2nd £3.25p. NAV is £3.81p. The discount is now just 3% (much lower than normal) AND unlike the other 2 VNH looks fully valued for now. The share price gain since Jan 2nd is partly because the discount has narrowed so much. That’s is SHARP contrast to VinaCapital Vietnam Opportunity Fund (LON:VOF) where the share price fall is because the discount has widened to extreme levels.

Hence VinaCapital Vietnam Opportunity Fund (LON:VOF) looking such a tempting buy now.

Finally; it might not be too much longer before Vietnam becomes officially an Emerging Market. It’s presently categororised as a frontier market. That promotion if and when it comes could see Vietnam seeing much wider investment interest. AND the current discounts could go to premiums then.

I.e there’s also a strong longer term case for investing in emerging Vietnam where more and more big Companies (like APPLE) are moving production to Vietnam, and that’s often from CHINA and TAIWAN.

I hold both VinaCapital Vietnam Opportunity Fund (LON:VOF) and VietNam Holding (LON:VNH).”

[hpcg] 19/2/2024 11:17

As all the trusts outperform the ETF on a NAV basis, then no, I don't think the ETF is the way to go. The only equity markets ETFs are shown to work for are developed large caps. Vietnam is far from efficient and far from liquid enough and far from large enough at this time.

[dickbush] 19/2/2024 11:16

IMO when Vietnam does finally move into the Emerging Market Indices, the discount to a market that has risen strongly will narrow very substantially.

[donald pond] 19/2/2024 09:16

I feel the world is moving away from investment trusts towards ETFs. Whether that's good or bad is open to debate, but it leaves VOF and many other ITs in an uncomfortable place. If the board were focused on shareholder returns surely a wind up would be on the cards? Vietnam is a great market but perhaps this isn't the vehicle to access it?

[arja] 19/2/2024 08:10

I guess the cable rate has an effect as Vietnam currency linked to $US and cable is up a bit in last few days . At least it os not dropping YET :) . I could not resist adding a few to my modest holding but will exit in the day if price stays at this level !

[spangle93] 19/2/2024 08:01

So, I guess the question is - does the fact that the index and the other Vietnam ITs have risen, while VOF hasn't, make this the bargain to cycle cash into, or does it point to VOF having fundamental flaws in stock selection compared to the others?

I haven't checked for a while, but it did seem that there was an overlap in the stocks held by each, so the underperformance is hard to fathom.

[arja] 19/2/2024 07:59

yes , sad news as it might make VOF drop further :) . Joking or maybe not judging by market depth in opening auction :)

[aleman] 19/2/2024 07:54

Ho Chi Min index flying now. Up another 1.3% to make over 20% since the Halloween low.

[aleman] 17/2/2024 09:40

VEIL was also lagging but is now putting in 5-month highs. It's discount is 18.5% so looks to have plenty of room to shrink. All the economic news coming out of Vietnam seems to be good so it looks to be in a bull market. There's a lot of upside here if the Vietnamese market continues to rise and VOF's discount shrinks back to less than 15% as one might expect. The 24%+ discount here is even starting to make the dividend look quite useful. Current yield is just over 2.6%.


free stock charts from uk.advfn.com

[spangle93] 16/2/2024 18:05

"Shares in VinaCapital Vietnam Opportunity Fund (VOF) have gone into reverse lately, despite gains in the country’s stock market and its two London-listed rivals VNH and VEIL. That’s put the £900m fund managed by Andy Ho at VinaCapital on a 24% discount, its widest since last May, giving it a lowly -2.6 Z-score."

[31337 c0d3r] 16/2/2024 13:43

VNH spread is actually only 3.87p (1.04%) based on firm buy (374.91) and sell (371.04) broker quotes for 300 shares.

Quite low, but still much higher than VOF which has a spread of only 0.4395p (0.1%) based on firm buy (442.4895) and sell (442.05) broker quotes for 300 shares.

Edit: for completeness, VEIL spread is 0.6706p (0.11%) based on firm buy (588.36) and sell (587.6894) broker quotes for 200 shares.

Not really significant unless you're a trader.

[dpmcq] 16/2/2024 13:29

I also think the share price is lagging as there must be a big seller or sellers to accomidate all the share buybacks. The big disconnect to NAV is in some ways due to not enough buyers wanting the shares.

[arja] 16/2/2024 13:15

I note that VNH has a 9p spread being a MM stock !

[arja] 16/2/2024 11:24

maybe the share price will rise when Vietnam indices fall :) . Markets sometimes surprise us and we feel like fools !

[hpcg] 16/2/2024 10:24

arja - 24% return on capital, find an investment better than that with the same risk profile. Trusts like doing it a lot less than trading companies because it reduces their fees. They'd rather be issuing more shares. These buybacks are making coin over the medium term, and if you don't think that is the case then you don't think the share price is ever going up ... so buy backs or not is immaterial.

[aleman] 16/2/2024 10:00

Discount is up again to 24.2%. The record outside of Covid is 25.7% but that's not really the full picture. It's spiked to around 25% very briefly a few times but rebounded back to 20% fairly quickly each time.