Bank stocks support foreign investment funds’ performance

17-Oct-2020 Intellasia | VnEconomy | 6:02 AM Print This Post

The latest report of Vietnam Holding foreign investment fund (VNH) by the end of September 2020 showed that the fund’s investment efficiency increased by four percent in the past month. This has made the investment efficiency in the first nine months of the year to negative 6.7%, more positive than the result at the end of the previous quarter.

In the report, VNH assessed that the banking industry is prominent in Vietnam. Unlike many developed countries at present, banks in Vietnam are more tightly controlled than many other industries, therefore they must carry out the highest standards, motivate banks to maintain healthier balance sheets as well as better possibility of recovering operations.

According to VNH, year 2021 can witness strong profit growth from banks thanks to the recovery of the economy (Gross Domestic Product (GDP) growth forecasted at seven to eight percent).

The top 10 investments of this fund recorded the presence of two banks including Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank) and Commercial Joint Stock Bank for Foreign Trade of Vietnam (VCB) with investment proportions of respectively 4.6 percent and 4.2 percent of the Net Average Value. Compared to the beginning of the year, the total investment value in the banking industry of VNH has increased from seven percent of NAV to 20%. VNH’s investment in the banking industry has the second highest investment proportion in the fund’s portfolio.

VNH has only started to invest in VCB since April 2020 and CTG from August 2020 while decreasing its investment in Military Commercial Joint Stock Bank (MBB).

By the end of September 2020, VCB shares declined by 7.3 percent compared to the beginning of the year but increased by 29.3 percent compared to the beginning of April. Meanwhile, CTG shares, by the end of September 2020, increased by 23 percent compared to the beginning of the year. The growth in August and September was 22%.

Although the investment efficiency remains negative, the improvement in the market price of bank stocks has made VNH to set a great expectation on this industry.

The most obvious proof for the support of bank stocks to investment fund is the case of PYN Elite. By the end of September, this Finnish investment fund announced its investment efficiency of 2.4 percent while it was still negative 2.38 percent by the end of August.

The top 12 investments of PYN Elite currently include up to six bank stocks, including CTG (investment proportion of 9.87%), Tien Phong Commercial Joint Stock Bank (TPB, 9.57%), HCM City Development Commercial Joint Stock Bank (HDB, 9.48%), Viet Capital Commercial Joint Stock Bank (BVB, 2.84%), Lien Viet Post Commercial Joint Stock Bank (LPB, 2.64%) and MBB (2.49%).

Bank stocks have been added more compared to the beginning of the year. in early 2020, the top 12 of PYN recorded only three bank stocks including TPB, HDN and CTG. Although PYN raised its investment proportions of these three bank stocks, its portfolio only has only seen clear changes since August, September 2020. In August, PYN increased investment in BVB stocks which were listed in July, bringing the stock code in the fund’s top 10 investments. In September, PYN further increased investment in LPB and MBB, putting the two stock codes in the 11th and 12th ranking, replacing PAN and KDH.

In two months of August and September 2020 alone, the market prices of banks saw significant improvement with strong rise of 20 percent in some banks such as LPB (35.7%), HB (28.2%), MBB (21.8%) and CTG (22%), supporting PYN to considerably improve its investment efficiency. In PYN’s portfolio, only BVB is growing fairly slowly at only 4.9 percent increase in two months.

Similarly, VEIL Dragon Capital, the biggest foreign investment in the market, is holding four bank stocks in the top 10 investments, including ACB (8.91%), VCB (8.79%), MBB (3.96%) and VPB (3.31%). The investment proportion of VEIL in bank stocks is 25.83%, only after real estate (26.97%).

The bank stocks held by VEIL increased well in the recent time, helping VEIL to record better result by the end of September with an efficiency of 0.15 percent compared to the beginning of the year.


Category: Finance, Vietnam

Print This Post