28th Mar 2019 13:38
LONDON (Alliance News) - VinaCapital Vietnam Opportunity Fund Ltd on Thursday reported a decrease in net assets in the first half of its financial year but managed to outperform its benchmarks.
In the six months to December 31, VinaCapital Vietnam's total NAV return was negative 3.6% compared to its benchmarks, the VN Index and MSCI Vietnam Index, shedding 8.0% and 10% in the same period.
At December 31, the fund's NAV per share stood at USD5.13 compared to USD5.38 at June 30, a 4.6% decrease.
VinaCapital Vietnam's net assets decreased 8.5% to USD954.8 million from USD1.04 billion at the start of the period.
"It is, of course, disappointing to report a decline in NAV. However, the fundamental economic argument for investment in Vietnam remained compelling, with strong growth, controlled inflation coupled with a stable currency and continued foreign direct and indirect investment," said Chair Steven Bates.
During the period, the fund declared an interim dividend of 5.5 US cents per share, the same as the year before. VinaCapital Vietnam's dividend policy remains paying out about 1% of NAV twice each year.
Bates continued: "As measured by the VN Index, which admittedly is an imperfect measure, the Vietnamese stock market reached a peak in April 2018, declined quite rapidly thereafter and has traded within a fairly wide range with no apparent sense of direction over the six months under review."
He added: "In the current global capital market environment where volatility and uncertainty prevail, there is a dearth of growth opportunities which offer enough fundamental strength to provide some shelter. Vietnam seems to be one of the few growth opportunities. The attractive economic conditions which I mention above leave us with a market which appears attractively priced, with a positive outlook for earnings and with a stable currency, supported by foreign investment flows. As described in the Investment Manager's review, many of the foreign inflows are in the form of direct investment into manufacturing and supporting infrastructure. Such capital is, of course, longer term in nature than investments into stock or bond markets. This augurs well for the Vietnamese economy for the foreseeable future."
Shares in VinaCapital Vietnam were up 0.9% Thursday at 329.00 pence each.
Related Shares:
VinaCapital Vietnam Opportunity Fund