Local ETFs draw foreign attention

The domestic exchange-traded fund VFMVN Diamond (HoSE: FUEVFVNĐ) on Tuesday issued an additional 300,000 certificates to raise the total amount of certificates to 148.3 million.

Local ETFs draw foreign attention
Foreign investors at the Ho Chi Minh Stock Exchange (HoSE). Vietnam hopes to lure more foreign capital to the local stock market through the strong development of domestic exchange-traded funds (ETFs). — Photo thoibaotaichinhvietnam.vn

The issuance helped boost the value of certificates listed on the Ho Chi Minh Stock Exchange to VND1.483 trillion (US$63.9 million) from VND1.48 trillion.

As of September 6, the net asset value (NAV) of the fund was VNĐ1.9 trillion, equal to VND12,884.58 ($0.56) per certificate.

The fund debuted on HoSE on May 12 at VND11,693.36 per certificate with charter capital of VND102 billion.

The fund has recently become a target for foreign investors, especially Taiwan-based investment fund CTBC Vietnam Equity Fund. The Taiwanese fund will buy 21 million certificates of VFMVN Diamond between September 7 and October 6.

The Taiwanese fund in late August reported it had raised $160 million to invest in the Vietnamese equity market, targeting high-potential listed companies on the Ho Chi Minh and Hanoi stock exchanges. In addition, part of the funding would flow into VFMVN Diamond ETF, which allows foreign investors to buy the stocks that have run out of foreign ownership limit (FOL) in the VN-Diamond Index on HoSE.

The market has reportedly reacted positively to the appearance of the Taiwanese fund in Vietnam on expectations the fund will boost the price of the stocks listed in VFMVN Diamond ETF’s portfolio.

The Vietnamese ETF on Monday reported there were 14 stocks in its portfolio. The biggest heavyweights were retailer Mobile World Investment (MWG), tech group FPT Corp (FPT), Techcombank (TCB), VPBank (VPB), Vietinbank (CTG), Military Bank (MBB) and Phu Nhuan Jewellery JSC (PNJ).

To capitalise on the investment by CTBC Vietnam Equity Fund, domestic securities firms and investors have reportedly bought shares of the 14 companies in advance.

Since late August, Mobile World Investment shares have gained as much as 15.6 per cent, Techcombank shares have increased by as much as 10 per cent and VPBank shares have risen 11 per cent.

Le Quang Minh, analysis director at Mirae Asset Vietnam Securities Co, said foreign investment funds would buy fund certificates at exchange-traded funds (ETFs) because they were not bound by the foreign ownership limit (FOL) rules.

“Their (foreign investors) purchases will help increase the market liquidity, especially boosting the trading volume in the stocks targeted by ETFs, and lift share prices,” he said.

 

Nguyen The Minh at Yuanta Vietnam Securities Co said ETF certificates were quite attractive in Taiwan and that could explain why the Taiwanese fund was interested in buying the Vietnamese fund’s certificates.

“Investment from Taiwan may increase in the near future through the strong development of domestic ETFs,” he forecast.

However, the ETF capital would not flow into Vietnam in short term, instead, the funds would have long-term plans, Nguyen Minh Hanh, ETF director at SSI Asset Management (SSIAM), said.

Foreign investment funds would have to pay a premium for the same stock compared to domestic investors, he said.

“Foreign funds will have to keep their decisions stand by depending on the quality of the target stocks and how much the premium is,” he said. “Investors won’t be happy if they lose once the purchase is done.”

Minh also said that a new source of capital always helped boost market morale, especially when large-cap stocks in the VN30 basket account for 70 per cent of the market’s total capitalisation.

“At the moment, the Taiwanese fund has little impact on the overall market as its size cannot match the Vietnamese market’s,” he added. “But this is still a good chance for Vietnam to draw the attention of Taiwanese investors.”

According to analysts, the valuation of the Vietnamese stock market is about 20 per cent lower than other markets in the region. But it is not a decisive factor to attract foreign investors.

On April 9, 2018, the VN-Index hit its all-time high of 1,204.33 points but profit growth has slowed down and outpaced the decline of the market since then, making Vietnamese shares much cheaper than regional markets.

Foreign investors have not paid much attention to Vietnamese stocks because the local market is still at the frontier level, while accounting standards are very different from international ones. Foreign funds will be drawn if market prospects are good and profitable.  VNS

Multi-trillion VND helps VN-Index regain peak

Multi-trillion VND helps VN-Index regain peak

The strong cash flow to the stock market in recent days has helped stock prices bounce back.

Covid-19 disrupts 'rules' of the Vietnamese stock market

Covid-19 disrupts 'rules' of the Vietnamese stock market

Investors are concerned about the stock market performance, which has become unpredictable because of the pandemic.

 
 

Other News

.
VIETNAM BUSINESS NEWS OCTOBER 16
VIETNAM BUSINESS NEWS OCTOBER 16
BUSINESSicon  16/10/2021 

Revenue to state budget increases over 10 percent

Hanoi authorities to meet FDI firms, ease their concerns
Hanoi authorities to meet FDI firms, ease their concerns
BUSINESSicon  16/10/2021 

The administration of Hanoi is scheduled to hold a dialogue with foreign invested businesses on October 19 to seek ways to tackle difficulties facing them amid the COVID-19 pandemic.

Where is Vietnam in the technology industry and global supply chain?
Where is Vietnam in the technology industry and global supply chain?
FEATUREicon  16/10/2021 

At the talks “Why Vietnam” held recently by the Ministry of Information and Communications, experts affirmed the significant role and position of Vietnam in the technology industry as well as global supply chains.

US awards grant to local firm to construct energy storage system
US awards grant to local firm to construct energy storage system
BUSINESSicon  16/10/2021 

The US Consulate General in HCM City on October 15 awarded a 2.96 million USD grant to AMI AC Renewables to construct a battery energy storage system pilot project in Vietnam.

Vietnam’s electric vehicle index announced for first time
Vietnam’s electric vehicle index announced for first time
BUSINESSicon  15/10/2021 

Vietnam’s electric vehicle index (EVI) has been announced for the first time, aiming to help enterprises in the value chain make decisions on production and business.

Remittances steady as lenders apply fresh transfer services
Remittances steady as lenders apply fresh transfer services
BUSINESSicon  15/10/2021 

Remittance flows from Vietnamese expatriates working abroad are predicted to remain resilient throughout the rest of the year, with the country’s central bank keeping its policy steady for now.

Haiphong to build free trade zone
Haiphong to build free trade zone
BUSINESSicon  15/10/2021 

The northern port city of Haiphong envisions setting up an inner-city free trade zone to drastically accelerate the city’s development.

Next six months vital for economic recovery: experts
Next six months vital for economic recovery: experts
BUSINESSicon  15/10/2021 

PM Pham Minh Chinh has chaired a webinar discussing Vietnam's measures in boosting post-pandemic economic recovery, adapting to the COVID-19 pandemic, overcoming economic disruption and strengthening locality-to-locality connectivity.

Govt projects GDP growth at 6%-6.5% next year
Govt projects GDP growth at 6%-6.5% next year
BUSINESSicon  15/10/2021 

The Government has targeted the country’s gross domestic product (GDP) growth at 6%-6.5% in 2022 despite the lingering challenges caused by the Covid-19 pandemic. 

Domestic groups move over to buyer’s side in M&A deals
Domestic groups move over to buyer’s side in M&A deals
BUSINESSicon  15/10/2021 

Vietnamese groups are becoming more active in acquiring other businesses, while overseas investors are seeing themselves hindered amid continued travel restrictions.

Bad debt trading platform to start operation
Bad debt trading platform to start operation
BUSINESSicon  15/10/2021 

The bad debt trading floor of Vietnam Asset Management Company (VAMC) is set to begin operation today (October 15).

More than $10 billion per year to develop the power sources and grid in the 2021-2030 period
More than $10 billion per year to develop the power sources and grid in the 2021-2030 period
BUSINESSicon  15/10/2021 

The demand for investment capital for the development of power sources and grids averages US$10-11.5 billion per year by 2030.

IMF forecasts Vietnam's GDP to see highest growth in ASEAN 5 group
IMF forecasts Vietnam's GDP to see highest growth in ASEAN 5 group
BUSINESSicon  15/10/2021 

The International Monetary Fund (IMF) has forecast Vietnam’s GDP to grow at around 3.8% this year, higher than that of its regional peers, Malaysia, Thailand, the Philippines, and Indonesia.

VIETNAM BUSINESS NEWS OCTOBER 15
VIETNAM BUSINESS NEWS OCTOBER 15
BUSINESSicon  15/10/2021 

MoIT vows support for Samsung, suppliers to maintain supply chain

One-year EVFTA: major European investors pour billions of dollars into Vietnam
One-year EVFTA: major European investors pour billions of dollars into Vietnam
BUSINESSicon  15/10/2021 

The Government has reported to the National Assembly about the implementation of EVFTA (EU-Vietnam FTA) over the last year.

VN reports public debt reaches VND3.7 quadrillion, plans to borrow VND571 billion next year
VN reports public debt reaches VND3.7 quadrillion, plans to borrow VND571 billion next year
BUSINESSicon  15/10/2021 

The Government’s report says that if the GDP in 2021 is below expectations, this will affect state budget overexpenditures as well as the national public debt and foreign debt safety indexes.

Real estate market: regulations inconsistent, market in deadlock
Real estate market: regulations inconsistent, market in deadlock
FEATUREicon  15/10/2021 

Real estate firms are looking forward to a new document to settling legal bottlenecks which have caused the property market to come to a standstill for the last two years.

VN businesses prepare to weather the storms of Covid, adapt to new normal
VN businesses prepare to weather the storms of Covid, adapt to new normal
FEATUREicon  15/10/2021 

All businesses have to struggle hard to survive the pandemic. However, they are keeping calm and optimistic, because the ‘alluvium will come after the floods’.

Curbs fail to faze South Korean M&A
Curbs fail to faze South Korean M&A
BUSINESSicon  14/10/2021 

According to data from MergerMarket, which is a business development tool designed specifically for the M&A sector, South Korean investors have carried out 69 M&A deals in Vietnam since 2005, with a total value of $5.1 billion.

Inconsistencies deter power plan feasibility
Inconsistencies deter power plan feasibility
BUSINESSicon  14/10/2021 

Power source development in recent years has been at odds with load distribution, and many coal-fired power plants expected to operate in the last five years are behind schedule.

 
 
 
Leave your comment on an article

OR QUICK LOGIN