Investment funds take action

From the beginning of September to last week, VinaCapital, the biggest fund management company by asset value, has spent totaling $6.4 million to buy back its shares in its three funds: Vietnam Opportunity Fund (VOF), VinaLand Ltd (VNL) and Vietnam Infrastructure Ltd (VIL).

Specifically, VinaCapital spent $5.2 million to buy back 1.1 per cent of VOF’s original issued shares, $700,000 to buy back 0.31 per cent of VNL’s issued shares and the remainders to buy back 0.44 per cent of VIL’s shares.

VinaCapital’s funds are among the Vietnam-focused funds having shares price falling below its net assets value (NAV) the most. VIL’s shares have discount of as high as 61 per cent as of September 19, the biggest discount among those of the funds reported by Rothchilds Funds.

VIF’s shares price, meanwhile, suffers discounts of as high as 51 per cent. VOF’s shares also have big discount of 32 per cent.

In the same situation with VinaCapital, DWS Vietnam Fund is also executing its share buyback programme due to the large difference between NAV per share and the quoted OTC price per share of the fund in secondary market.

Within September, the fund had repurchased 4.1 million shares, after repurchasing 35.7 million shares or 7.34 per cent of the share capital until August 30.

However, the fund admitted that “the discount has remained at an unacceptable level” and even considered additional measures. These include cancelling treasury stock, moving the listing of the shares to another exchange, capital distribution, and tender offer for a number of shares, it wrote.

The share buyback trend of Vietnam-focused investment funds reflected a continuing struggling situation of local stock market as well as of those funds. According to Rothchilds Funds on September 19, almost all those funds are witnessing their fund share price falling far below their NAV per share.

Among them, VinaCapital’s funds, Vinafund’s VF1 and VF4, Manulife Progressive Fund and DWS Vietnam Fund are suffering the biggest discounts, from 40 per cent to 60 per cent.