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Period ahead ‘golden opportunity’ for investors
Experts forecast investment funds will boom in 2008, helping bolster and develop the financial market.
The State Securities Commission (SSC) recently licensed a series of investment fund management companies, including the VND100bil ($6.25mil) Petroleum Financial Fund, the VND25bil ($1.5mil) Loc Viet Fund and the VND25bil ($1.5mil) Sabeco Fund management companies.
There are now 25 operational domestic investment fund management firms, boasting a total capital of VND876bil ($54.75mil) working alongside many other foreign owned fund management companies operating in Vietnam, including Dragon Capital, VinaCapital, Mekong Capital, IndoCapital and Maxford Investment Management Ltd.
Vietnam Fund Management (VFM, the first fund management company licensed in Vietnam), has just received permission to set up the VND8tril ($500mil) VF4, aptly named because it is the company’s fourth fund. VFM is planning to set up a fifth, VF5 in 2008, which will focus on the real estate market.
Orient Management Company (OMC) has set up fund, OF1, with total capital of VND50bil ($3.12mil), and is also planning several more for 2008.
After establishing the $26mil Vietnam Focus Fund SP, specializing in listed share items, Maxford Investment Management Ltd plans to set up a second called Vietnam OTC & IPO Fund. The company hopes to raise $40mil from Investors in Hong Kong, China and Taiwan.
Lawrence Kook, Investment Director of Maxford Investment Management, said the funds will invest in six fields, banking – finance, telecommunication, retail market, real estate, power and infrastructure.
95% of Vietnam Focus Fund SP’s total capital had been invested by the end of November. Mr Kook said this is clearly the best time to buy, as the official bourse is falling.
He also revealed that his company will participate in Vietcombank’s IPO, though he thinks that the initial VND100,000/share price is relatively high.
“Vietnam’s capital market has grown to a level that we feel the need for a second fund focusing on OTC shares and IPOs,” he said.
“We are also planning to set up several, more specific funds soon which will focus on real estate or infrastructure,” he added.
Mr Kook says that the Government should raise the ceiling foreign ownership level of local companies to above 49%. Currently, there is no more room for foreign investors in major local companies due to limited share availability and market inelasticity.
Pham Khanh Lynh, Deputy General Director of VFM, said 2008 will be the year of investment funds. He says upcoming equitisations from 2008-2010 will be the last golden opportunity for investors.
Statistics show that 90% of listed companies have been equitised. Vietnam will equitise an additional 1,500 enterprises by 2010, including firms in major sectors such as banking, telecommunication, air transport and petroleum.
That explains why VFM decided to set up VF4 to invest in soon to be major bourse items, including Incombank, BIDV, MobiFone and Vinaphone.
VNN
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