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Typhoon hits Vietnam funds
Vietnam-based investment funds have been hammered so far this year, with some losing as much as three quarters of their value.
UK-based Rothschild Securities’ LCF Rothschild Emerging Market Funds Research said that net asset value (NAV) of 23 investment funds out of 26 surveyed dedicated to Vietnamese equity holdings have fallen away considerably. PXP Vietnam Fund was the biggest loser with 70.6 per cent wiped from its NAV so far this year, followed by the Vietnam Emerging Equity Fund with 70.4 per cent.
Kevin Snowball, CEO of PXP Vietnam Asset Management who manages these two funds, said 2007 was a great year for PXP Vietnam Fund due to its exposure to the VN Index. But with the country’s bourses taking a battering, so too did the two funds. “The majority of our holdings are marked to market on a daily basis, which is true of very few other funds. This might help to explain why the discounts are narrower,” said Snowball.
During the period, the VN Index fell 69.6 per cent. The next biggest losers were Vietnam Dragon Fund and Vietnam Growth Fund with 63.1 per cent in losses, Blackhorse Enhanced Vietnam Inc (62.6 per cent), JF Vietnam Opportunities Fund (62.1 per cent) and Vietnam Enterprise Ltd (61.1 per cent). “Everything is down this year, most obviously the VN Index which is down almost 70 per cent, so no surprise there,” Dominic Scriven, director of Dragon Capital, who manages Vietnam Dragon Fund and Vietnam Growth Funds, told Vietnam Investment Review.
A Vietnam Holdings source claimed that the decrease was a systematic risk and was reasonable given widespread international financial crisis and the tumbling Vietnamese stock market. “We are a long-term investor so we will stay in this market,” he said, adding that in 2009, market would be in positive territory.
Among 26 Vietnam-based investment funds surveyed by Rothschild, only three - Vietnam Property Holding, JSM Indochina and Mekong Enterprise Fund - enjoyed slight gains or broke-even this year with 17.6 per cent, 9.6 per cent and 0 per cent, respectively.
“Our fund’s uniqueness is that we only invest in smaller, private sector companies with strong management teams. We provide significant levels of value-added assistance to the companies, instead of foreign-invested or equitised ones,” said Tieu Trong Khuong, spokesperson at Mekong Capital who runs Mekong Enterprise Fund.
The VN Index skyrocketed to a peak of around 1,174 points in March 2007 then fell to around 309 points last week, wiping 75 per cent of value off the index.
VIR
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