New IPOs coming soon

Vinawealth’s chief investment officer Sebastian Subba said the IPO for Vinawealth Enchanced Fixed Income Fund (VFF) would be launched in January 2, 2013. Also, MBCapital’s portfolio manager Ngo Long Giang said the IPO for MB Capital Vietnam Bond Fund would happen in January, but did not specify the date.

Subba also indicated that Vinawealth was planning to launch  two more open-ended  funds, with an equity fund and a balanced fund,  in the first quarter of 2013.

The accelerating plans must conform to the IPO timeframe allowed by the State Securities Commission, in which the regulator allowed a minimum of 20 and a maximum of 90 calendar days  from the approval date to complete multiple steps prior to IPO like making fund documents, public announcements, holding press conference and road shows.

After the IPO, companies will also get 90 days at maximum to finish the offering and must reach at least VND50 billion ($2.4 million) subscriptions to be eligible to establish the open-ended funds.
Giang said his company received  reliable pre-commitments for cashing in this IPO, with committed money amount “already exceeded VND50 billion ($2.4 million).”

Among them was a commitment from MBCapital’s Japanese partner United Investments, Giang added, while declining to disclose the amount. United Investments coordinates with MBCapital to run two Japan-based open-ended funds.

Also, Subba said Vinawealth was “confident that we will be able to receive much more subscriptions than the minimum amount [of VND50 billion ($2.4 million)],” indicating that the company had received “very encouraging” interest from its investors including foreigners.

Such aggressive moves by MBCapital and Vinawealth come amid remaining doubts within the maturing Vietnamese market about the ability of open-ended funds running smoothly in the near future.

Many major investment funds are still postponing their intention to establish open-ended funds due to fear of redeeming pressures in such a sluggish stock market. The operating results of closed-ended funds have proven increasingly gloomy, creating hope that the new legal framework for open-ended funds, completed earlier this year, may offer a change.

The new tax regime for institutional investors had not been approved yet, posing  significant challenges to fund managers to allure investors cash-in new funds. Expressing more optimism, Subba said he believed that open-end funds “will definitely be a new trend from 2013.”

Both two companies are expressing confidence in the  fixed-income investment channel in next year. The bond yield is trending downward in Vietnam, which follows a lowering inflation outlook and ample liquidity in the nation’s banking system.