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VinaCapital warns market disruption could persist in short term
VinaCapital has warned that the significant disruption in capital markets following the detention of banker Nguyen Duc Kien could persist in the short term.
VinaCapital says Kien's detention has created a highly volatile environment throughout Vietnam's capital markets.
Kien's high profile as the former vice-chairman and member of ACB's board has directly impacted the banking sector, with share prices of ACB, Eximbank (EIB) and Sacombank (STB), all of which are tied to Kien from previous lending activity and shareholdings, having fallen by the maximum allowable amount (daily floor price) over the past three trading sessions.
VinaCapital says pressure from banking related stocks has spilled over into the overall market, with the VN Index down nearly 10% this week.
As a result, VinaCapital Vietnam Opportunity Fund Ltd (VOF) has seen a negative impact on its listed equity component which makes up 38.6% of the fund's total NAV as at 31 July.
Prior to Tuesday's event, VOF's listed portfolio had increased 8.9% for the month of August.
However, following the three-day sell-off, that increase has now turned into a 1.7% decline, equivalent to an approximate 0.7% reduction in overall NAV.
Leading this decline, has been VOF's banking sector holdings (9.5%of NAV).
VinaCapital's managed Vietnam Infrastructure Limited (VNI) has also seen a significant impact from its listed equity holdings, which accounts for 24.9% of the fund's total NAV as at 31 July.
Following this week's events, VNI's listed portfolio has decreased by 4.6% month to date; equal to a nearly 1.3% reduction in its overall NAV. VNI does not hold shares in any bank sector holdings.
VinaLand Limited (VNL) does not directly hold any listed equity and therefore has seen no immediate impact from these events.
Chief investment officer Andy Ho said: "We are continuing to monitor this developing situation closely in order to protect our shareholders' interests.
"These events have caused a significant disruption in our capital markets, which could persist in the short term. However, as long term investors, we believe the overall fundamentals for Vietnam's other blue-chip equities remain unaffected and there appears to be an opportunity for investment during this current downtrend."
At 3:41pm:
(LON:VNI) share price was -0p at 0.24p
(LON:VNL) share price was -0.01p at 0.47p
(LON:VOF) Vietnam Opportunity Fund share price was -0p at 1.63p
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