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viewVinaCapital Vietnam Opportunity Fund Limited

Vinacapital Vietnam Opportunity Fund makes strong start to current financial year

The fund outperformed the benchmark indices in Vietname

Vietnam
GDP growth slowed to 6.2% in 2016 from 6.7% in 2015

The net asset value (NAV) per share of Vinacapital Vietnam Opportunity Fund Ld (LON:VOF) rose sharply in the second half of last year.

In dollar terms the NAV per share increased by 10.9% from US$3.77 to US$4.18, while in sterling terms it rose 19.9% from 282p to 338p.

This compares with an increase of only 3.0% in the benchmark Vietnam Index (VN Index) and -10.3% for the MSCI Vietnam Index.

VOF shares currently trade at 284p.

The fund's chairman, Steven Bates, was happy to report that, thus far, President Trump's election as president of the USA had not had any effect on asset values in Vietnam, despite his move to terminate the USA's involvement with the Trans Pacific Partnership.

“Several factors accounted for VOF’s strong performance. Firstly, our high conviction, active stock selection distinguishes us from other passive, index-replicating strategies. Positions in listed companies including Airports Corporation of Vietnam (ACV), Hoa Phat Group (HPG), Novaland Group (NVL), and Vinamilk (VNM) were the top contributors to the listed portfolio’s performance, with the quoted share prices increasing 194.0%, 29.3%, 20.2%, and 9.4% respectively over the six months to 31 December 2016,” said Andy Ho, the managing director of VinaCapital Investment Management, which oversees the fund.

“Second, our ability to invest into pre-IPO, private equity deals, or as part of the Vietnamese government’s privatisation plan (or equitisation as it is known in Vietnam), allows us to seek opportunities outside traditional asset types. In fact, of the top contributors to performance this half-year, two of these listed stocks – ACV and NVL – were previously unlisted investment opportunities before recently commencing trading on the main bourses,” Ho noted.

The pace of equitisations and public listings in Vietnam is quickening, which bodes well for VOF.

Meanwhile, Vietnam's economy and markets continued to grow in 2016, albeit more slowly than in 2015.

Gross domestic product (GDP) growth slowed to 6.2% from 6.7% in 2015, but that still put the economy in the upper echelon of global performers.

“We believe that the pieces are in place for even stronger growth in 2017 – albeit with some new challenges on the horizon, such as tightening monetary policy,” Ho said.

Profit before tax in the six months to the end of December rose to US$85.48mln from US$5.23mln the year before.

Earnings per share rose to 41 cents (32p) from two cents (a penny) the year before.

No interim dividend has been proposed.

Shares in VOF were up 0.9% at 284p in late afternoon trading.

Quick facts: VinaCapital Vietnam Opportunity Fund Limited

Price: 449.5 GBX

LSE:VOF
Market: LSE
Market Cap: £766.67 m
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