9th Sep 2019 13:27
(Alliance News) - Vietnam Enterprise Investments Ltd on Monday said its net asset value rose very slightly in the first half of 2019, with Vietnam Engine & Agricultural Machinery Corp the highlight of the portfolio.
The firm's NAV per share in dollar terms rose 0.3% to USD6.58 on June 30 from USD6.56 on December 31 and rose 0.4% in pound terms to GBP5.17 from GBP5.15 in that same period.
"The star performer in the portfolio was undoubtedly [Vietnam Engine & Agricultural Machinery] an off-benchmark investment in the capital goods sector. The stock delivered an impressive 47.5% return in the first half of 2019 as the re-rating of VEA, which registered to trade on the Unlisted Public Company Markets in July 2018, continued well into 2019. At the end of the first half of 2019, VEA was still trading at just 9.6 times our 2019 projected earning with an effective dividend yield of 7.9% for 2019," said Portfolio Manager Vu Huu Dien.
The Vietnam-focused investor started a share buyback programme in mid May, and had repurchased 697,398 shares under the programme as at June 30. There was no dividend paid in the interim period, and none the year before either.
Vietnam Enterprise Chair Stanley Chou said: "While there might be some global concerns about Vietnam due to trade friction, we believe there is limited risk here. Vietnam is clearly a beneficiary of the trade war between the US and China. Vietnam's economy remained solid in the first half of 2019, with leading indicators performing in line with government targets.
"We are particularly encouraged by Vietnam's strong domestic fundamental story. The government's strong market development focus was underpinned by the launch of covered warrants which attracted a high demand from investors. This, together with the VN30 Index Futures and Derivatives Market, have proved to be attractive products resulting in trading values of almost USD400 million per day. [Vietnam Enterprise] has continued to capitalise on these short and long-term market drivers as our team leverages its unique expertise to execute our strategy, outperforming the market over three years and five years by 8.7% and 26.9%, respectively.
"Looking ahead, in a global environment where slowing growth is a recurring theme, Vietnam continues to be a bright spot for investors with growth for 2020 projected to reach the high teens on a far more attractive valuation than regional peers."
Shares in Vietnam Enterprise were down 0.4% at 493.05 pence in London on Monday afternoon.
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Vietnam Enterprise Investments