26th Sep 2018 09:14
LONDON (Alliance News) - Vietnam Enterprise Investments Ltd on Wednesday reported a decrease in its net asset value per share due to "volatile market conditions" in the first half of the year.
The FTSE 250-listed investment fund focused on Vietnam said NAV per share at the end of the half was USD6.81, down 3.6% from USD7.06.
In the six months ended June, Vietnam Enterprise's total net assets decreased 3.9% to USD1.49 billion from USD1.55 billion.
The fund lagged behind its benchmark, the Vietnam Index, which fell by just 2.4% in the period.
The index was at its highest point in the last 11 years in April before undergoing a "significant" correction due to the increased concerns about the country's outlook given the escalating trade tensions between the US and China, the fund said.
The correction was mainly due to the banking and mid-cap property sectors, who had been big risers in the early part of the year.
Vietnam Enterprise Investments said it was outperforming the index in the first five months of the year but struggled in June.
Asia Commercial Bank, which gained 5.0%, and Military Bank, a 4.3% riser, contributed to the fund's strong performance at the beginning of the year.
The fund suffered, however, from its underweight holding in large property stocks - namely the recently floated Vinhomes, the property arm of Vingroup which is now the biggest stock on the index.
Vietnam Enterprise Investment's portfolio also was hurt by its second largest holding, Mobile World, falling 13% in the period. Vietnam's largest retailer had a challenging first half due to a "slowdown in its traditional verticals of distribution".
Vinamilk, which was replaced as the biggest stock on the Vietnam Index during the half, struggled in the half, closing down 19%. The company posted lower than expected first quarter numbers, driving the "disappointing performance".
The fund is not proposing an interim dividend, unchanged from a year before.
Looking ahead, the fund said it is "encouraged" by the outlook for Vietnam, despite the "uncertainties in the global economy".
The Vietnamese currency, the dong, has suffered from the US China trade tensions, but the economic outlook for the country is still "positive" with sustainable growth expected.
Chairman Wolfgang Bertelsmeier said: "We see opportunities arising from this market softening that our differentiated proposition can leverage, supported by the knowledge that Vietnam's economic outlook remains positive with sustainable growth expected for the remainder of the year and beyond. In this context, VEIL is very well positioned to benefit from Vietnam's long-term growth and the country's developing stock market and to continue to deliver attractive returns for shareholders."
Shares in Vietnam Enterprise Investments were down 0.4% Wednesday morning at 466.00 pence each.
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