CTBC Investments enters in Vietnam with signature $160 million CTBC Vietnam Equity Fund

August 31, 2020 | 12:05
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Dragon Capital officially confirmed that CTBC Investments, one of the most prestigious asset management firms in Taiwan, has launched CTBC Vietnam Equity Fund to cash in on the attractive local stock market.
ctbc investments enters in vietnam with signature 160 million ctbc vietnam equity fund
CTBC Investments will invest in Vietnam with its $160 million CTBC Vietnam Equity Fund. Photo: Ho Chi Minh City

Set to bridge the gap between Taiwanese investors and the Vietnamese financial landscape, CTBC Vietnam Equity Fund’s size is initially committed at $160 million.

CTBC Vietnam Equity Fund is a bridge to help investors in Taiwan (China) participate in investing in the Vietnamese stock market.

CTBC Investments is an investment arm of CTBC Holdings, one of the largest financial groups headquartered in Taipei of Taiwan with over 27,000 employees worldwide.

CTBC Holding’s banking arm, CTBC Bank has a total of 152 branches in Taiwan and 111 outlets overseas, including in Vietnam.

Dragon Capital said that it would help CTBC build a stock portfolio in Vietnam, helping the Taipei research team dig deeper with insights and thorough analysis of the local market.

There has been growing in interest in Vietnam among Taiwanese financiers over the past few years and the fund would help speed up investment activities in burgeoning sectors like consumer goods, finance, and property.

The Taiwan-based fund has completed its very first capital mobilisation for CTBC Vietnam Equity Fund from August 17 to August 21. Accordingly, the fund is ambitious to pour cash in well-positioned, sustainably growing listed companies. Its portfolio also includes VFMVN Diamond ETF – an ETF fund that mimics VN Diamond, one of the three indices together with VN Fin Lead and VN Fin Select.

CTBC Investments representatives expressed their optimism in Vietnam, saying the S-shaped country is now the second-largest constituent in the MSCI Frontier Market Index, and even surpasses some emerging markets in terms of capitalisation and liquidity.

However, though it has been expected that Vietnam could be given the Emerging Market status instead of the current Frontier Market, the country still has a number of challenges.

According to a recent VIR report, MSCI cited some major roadblocks that Vietnam should work towards tackling, including foreign ownership limits (FOL), a lack of proper English information disclosure, lack of offshore currency market, limitations in onshore currency markets, mandatory registration of accounts, and more.

The foreign fund also carries positive views on Vietnam’s banking industry, predicting that by 2025, there will be 3-5 local banks listed in overseas stock exchanges, 2-3 of which will be among the 100 largest Asian lenders.

Furthermore, the Taiwanese investor also speaks highly of Hanoi-based conglomerate Vingroup – a Vietnamese version of Samsung – and the impressive performance of its property subsidiary Vinhomes, the country’s biggest real estate developer.

Mobile World Group (MWG) also looks appealing, according to CTBC Investments, as the leading retailer in the country.

In addition, state-owned credit institution Vietcombank and “King of Steel” Hoa Phat Group are also high on its agenda.

By Luu Huong

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