Dragon Capital, which has been in Vietnam since 1994, is one of the investment fund management companies with the longest history in the Vietnamese stock market. 

Starting with an investment fund with modest capital of $16 million, Dragon Capital is now a large investment fund management company which manages dozens of funds.

Total assets managed by Dragon Capital are worth roughly $4 billion. Some noteworthy member funds include VEIL (Vietnam Enterprise Investment Limited), CTBC Vietnam Equity Fund, and DCVFM VNDiamond ETF.

VEIL, a closed-end fund established in 1995, is the oldest and largest one in Vietnam with a NAV of $1.6-1.7 billion. VEIL’s certificates are traded on the London Stock Exchange.

Over many decades, VEIL has been considered a powerful investment fund in Vietnam. Its net assets soared by 60 percent in 2017, but assets fell by 36 percent in 2022.

Shares in leading enterprises

Its latest report showed that as of February 16, 2023, VEIL had 10 largest investment items, including ACB, VPBank (VPB) and Vietcombank (VCB) and six enterprises belonging to VN30, namely Vinhomes (VHM), Hoa Phat (HPG), The Gioi Di Dong (MWG), Becamex IDC (BCM), PV Gas (GAS) and FPT, and Khang Dien Housing (KDH).

Besides VEIL, Dragon Capital manages many large funds such as CTBC Vietnam Equity Fund, Norges Bank and Samsung Vietnam Securities Master Investment Trust.

Through its domestic legal entity DCVFM, Dragon Capital manages many other funds, including DCDS, DCBC, DCBF, DCIP, VFMVFA, VFMVSF, DCVFM VNDiamond ETF and DCVFM VN30 ETF.

Recently, VEIL invested in Vietnam’s stocks. A report said that 98 percent of its NAV was in stocks as of February 16, 2023, while cash accounted for 2 percent, which is lower than the 13 percent in November 2022 when the stock market fell below 900 points.

As of February 16, VEIL’s total assets had reached $1.677 trillion, an increase of $200 million compared to November 17, 2022.

Banks, real estate

Of VEIL’s investment portfolio, MBBank (MBB) is no longer among the top 10  investment items. 

It was replaced by ACB shares of the Asian Commercial Bank (13.19 percent) as of February 16, followed by VPBank (VPB) with 12.26 percent, Hoa Phat (HPG) with 7.7 percent, and Vietcombank (VCB) with 6.58 percent. 

The Gioi Di Dong (MWG) is in the fifth position with 6.48 percent, while FPT, PV Gas (GAS), Became IDC (BCM), Vinhomes (VHM), and Khang Dien Housing (KDH) are in the following positions.

The five largest investment items in VEIL’s portfolio are ACB, VPB, HPG, VCB and MWG which have investment value of over $100 million.

VEIL also holds hundreds of millions of dollars worth of shares in Dat Xanh Real Estate (DXG), PVD, Sacombank (STB), and Kinh Bac Urban Development (KBC).

The fluctuations in financial and real estate markets have recently prompted Dragon Capital to make several important decisions. 

It sold 25 million DXG shares within three weeks, starting in late January.  

On February 20, it bought an additional 4 million ACB shares through five funds, raising its total number of ACB shares to 272 million, or 8 percent of the bank’s shares.

The largest fund in Vietnam continued to inject money into bank and real estate shares and securities with great potential, bringing high profits. However, the shares have recently faced high risks.

Real estate firms are facing difficulties in cash flow and capital sources. The liquidity of the real estate market is weak, while many real estate projects are facing legal problems. 

These difficulties are not expected to end soon, especially for realtors developing resort and high-end housing projects with capital from bank loans.

Meanwhile, banks are facing more bad debt because of enterprises’ difficulties, while their NIM (Net Interest Margin) may fall because of high deposit interest rates.

Manh Ha