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Penny stocks not a foolish buy
Many penny stocks appear set to yield good profits for investors.
For instance, the four closed-end funds listed on the Ho Chi Minh Stock Exchange are trading at around 50 percent of their net asset value.
Manulife closed at VND3,300, Prudential Fund Management Vietnam ended at VND4,500, while VF1 and VF2 finished respectively at VND7,900 and VND5,200.
Prudential announced on its website that its total assets on April 2 were worth VND395 billion (US$22.2 million) for a net asset value, or NAV, of VND7,900.
The fund manager restructured its portfolio in February which has since appreciated by 4.3 percent more than the VN-Index.
Prudential had announced at the time of public offering that it would allocate 30 percent of its assets to equity and 70 percent to bonds.
In 2008, it bought five-year bonds with 16-20 percent coupons. Interest rates have since plunged to single digits.
Thus, its NAV fell only 29 percent last year despite a VND75 billion dividend payout while the VN-Index nosedived 66 percent.
These facts make Prudential Fund Management a top pick, analysts said.
Vina Securities Corp. said this month its portfolio comprises shares in profit-making companies that pay high dividends, do not invest in the stock market, and are not into exports, a sector expected to take a hammering because of the global economic slowdown.
They include transport firm Transco, agricultural equipment supplier Dabaco, auto assembly company Haxaco, construction firm Vinaconex Xuan Mai, concrete maker Hoa Cam, construction firm Song Da No. 1.01, confectioner Bibica, Binh Duong BB Package Making Co., beverage producer Chuong Duong, cement maker Bim Son, construction material supplier DIC and Petrolimex Gas Joint Stock Co.
The stocks moved up by an average of 11.2 percent compared with the VNIndex’s 9.7 percent last month.
Analysts said some listed companies whose share prices are low are investing in projects that would not make profits this year but later and so offer an excellent opportunity to make substantial profits in the future.
thanhnien, Dau Tu Chung Khoan
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