Irish fund to inject capital into bourse

“Vietnam’s stock market gives us many opportunities. We’ve decided to inject our money into the local stock market as we don’t want to miss these opportunities,” said Snowball, an investor with significant experience in Europe and many Asian countries.
He confirmed that his firm already had a trading code from the State Securities Commission (SSC) and had started buying stocks on the Vietnamese stock market last month.
PXP is a close-ended investment fund that recently listed on the Irish stock exchange.
The new fund is licensed to invest in the Vietnamese stock market with a first tranche of $5 million, half of it committed by foreign institutional investors.
“Unlike other funds such as VEIL, Vietnam Opportunities Fund and the Mekong Enterprise Fund which have already done well in private equity investment, PXP will focus on investing in listed stocks,” Snowball said.
“We will seek opportunities to buy shares still available to foreign investors and from listed firms with a market cap of more than $5 million. Based on the market situation, we will decide when, what and how many shares to buy,” he said.
According to the Ho Chi Minh City Securities Trading Centre, 18 of the 22 existing listed shares are now available to foreign investors, including SAM, BT6, SAV, GMD, BBC and HAP.
“The $5 million is just our initial pledge. We expect to double our investment pledges to $10 million in two months if our first investment in the stock market succeeds and if there are more new listings on the market,” Snowball told Vietnam Investment Review last week.
Jonathon Waugh, chief representative of Jardine Matheson Vietnam and an advisor to PXP Asset Management, said: “Phanxipang [Fansipan] is the name of the highest mountain in Vietnam. We hope it will be the symbol for our business success here.”
Waugh, Snowball and PXP executives said they wanted PXP to become a blue-chip fund in Vietnam in the future, meaning the fund will invest in stocks of large and well-performing companies such as Vietnam Airlines, Vinamilk and PetroVietnam.
VIR has learned PXP is just one of many foreign investment funds investigating a move into Vietnam’s stock exchange. The others have already committed hundreds of millions of dollars in funds.
Among them is Switzerland’s FMO and Germany’s DEG, which have approached many businesses and several partners. FMO wants to invest in credit organisations, and has discussed business with Saigon Thuong Tin Bank (Sacombank), while DEG is interested in information technology companies.
Foreign investment funds are now operating in a better business environment. The legal framework for foreign investment in shareholding companies and listed firms is clear, and the number of state-owned enterprises going public is growing.
Besides the more than VND2 trillion ($129 million) worth of shares of the 22 existing listed firms, there is a further VND15 trillion ($967.7 million) worth of shares of unlisted businesses, giving the funds a wide range of choices.
“It is the best time to buy shares of listed companies that offer average dividends of not less than 10 per cent a year,” said Dominic Scriven, director of Dragon Capital, the sole successful fund management company in Vietnam with more than $70 million disbursed so far in unlisted and listed stocks.
“Investment funds play a vital role in creating energetic trading activities in the market, therefore good care should be taken to keep them operating efficiently and drawing more investors into Vietnam in the future,” he said.
Other experts agreed with Scriven, predicting there would be more investors willing to invest on the local bourse via funds because the Vietnamese market still had great potential.