25th Oct 2019 11:31
(Alliance News) - VinaCapital Vietnam Opportunity Fund Ltd said Friday its net asset value dipped over its recently ended financial year, resulting from a weaker performance from the capital market component in its portfolio.
As at June 30, the Vietnam-focused investor posted a net asset value of USD5.17 per share, down 3.9% from USD5.38 the same date the year before. VinaCapital's net asset value negative return was 1.9%.
The net asset value decline was due to an underperformance in VinaCapital's capital markets segment of its portfolio, due mainly to weaker earnings from steel manufacturer Hoa Phat Group.
Also, Coteccons Construction's share price was lowered by persistent rumours that a consortium led by the largest shareholder Kusto had acquired a large stake in the company that would allow them to veto certain decisions proposed by its board that could affect operations.
These rumours led some shareholder to divest their holdings and sell indiscriminately, despite the valuation.
The overall fair value of VinaCapital's investments as at June 30 was USD983.0 million, down 7.9% from USD1.07 billion the same period the year before.
VinaCapital's cash & cash equivalents as at June 30 stood at USD16.0 million, up from USD14.9 million the same date the prior year. Meanwhile the company's pretax loss for the annual period was USD3.6 million, swinging sharply from a profit of USD152.7 million the year before.
"As the markets have become more sophisticated, and the investor base has broadened, so its correlation with global markets looks to have increased. This past year, it has been difficult to hide from the sell-off triggered by the Federal Reserve's tightening of monetary policy in the second half of 2018, or indeed from the rally which followed the reversal of that policy in the first quarter of 2019," said Chair Steven Bates.
"It is likely that, over time, Chinese investment in Vietnam will increase much as has happened with other countries in the region. The combination of low costs, an educated population and improving infrastructure is indicative of continued rapid growth," Bates added.
Shares in VinaCapital were up 0.2% at 344.50 pence on Friday in London.
By Dayo Laniyan; [email protected]
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