The investment funds managed by Dragon Capital have announced purchase of 4 million STB shares of Sacombank on November 6. Of this, Vietnam Equity Fund bought 3 million shares, and Vietnam Enterprise Investments Ltd (VEIL) 1 million.

Dragon Capital collected 21.4 million shares of private banks over the last month, raising the amount of shares it holds from 92.7 million on October 19 to 114 million shares now, which means an ownership ratio increase from 4.91 percent to 6.05 percent as shown in the newest report.

The foreign investment fund is buying shares when STB share prices hover around VND27,000-30,000 per share, which means Dragon Capital has to pay VND600 billion to acquire the shares. 

Good business results were an important reason to buy. Sacombank announced a pre-tax profit of VND2.085 trillion in the third quarter, an increase of 36 percent over the same period last year. The accumulated profit in the first nine months of the year increased by 54 percent to VND6.84 trillion.

Its total assets have increased by 10 percent compared to early this year to VND651.288 trillion. Its total outstanding loans have reached VND472.073 trillion, up 7.6 percent, while the provision against risks has increased by 18.5 percent to VND6.67 trillion.

However, its shareholders have expressed worry about credit quality with total bad debts up by 2.4 times compared with earlier this year to VND10.4 trillion.

Of this, the third-group debt had increased by 5.2 times to VND2.961 trillion, fourth-group by 4.3 times to VND3.198 trillion and irrecoverable debts (fifth-group) soared sharply by 40 percent to VND4.227 trillion.

Dragon Capital has also injected money into Vinaconex, a construction company, to become a big shareholder in early November. Dragon Capital bought ad additional 1.3 million VCG shares to raise its ownership ratio to 5.07 percent (27 million shares).

Analysts commented that this was a ‘bottom fishing’ action as VCG share prices dropped to below VND20,000 per share in late October. The share prices later bounced back to VND23,250 per share on November 8.

FRT shares of FPT Retail are also a target for Dragon Capital. The foreign fund has bought more shares. The amount of FRT shares held by Dragon Capital increased from 10.77 million on September 14 to 13.4 million on October 26.

Dragon Capital manages the largest group of investment funds in the Vietnamese stock market with total assets of $4 billion.

Manh Ha