Vietnam Enterprise Investments’ NAV per share increased 46.2% in sterling terms

Vietnam Enterprise Investments’ NAV per share increased 46.2% in sterling terms – Vietnam Enterprise Investments Limited (VEIL) delivered its annual report and financial statements for the year ended 31 December 2017.

Financial highlights:

•       In US dollar terms, NAV per share increased 60.1% from US$4.41 to US$7.06, outperforming the VN Index by 7.3%.

•       In UK sterling terms, NAV per share increased 46.2% from £3.57 to £5.22.

•       VEIL’s share price rose 49.3% in UK sterling terms.

•       VEIL’s share price discount to NAV at the end of the period narrowed to 15.27%, from 17.09% at the end of 2016, reflecting VEIL’s portfolio performance

Investment highlights:

•       VEIL continued to hold the majority of its portfolio in listed equities, with only 7.5% in OTC/pre-listing equities.

•       VEIL maintained its strategy of tracking high profit growth and focus on listed blue-chip companies that benefit from Vietnam’s macro dynamics. In addition, it actively participated in the privatisation of state-owned companies and IPOs of private companies.

•       During the period, VEIL participated in 17 deals with a total value of more than $280m from privatisations, IPOs and a private placement.

2017 was a record-breaking year for Vietnam’s economy

 The Government achieved all of its economic growth and stability targets for the year. GDP growth reached 6.8%, its highest rate in 10 years, and surpassed the Government’s target of 6.7%. The stock market performed robustly in 2017 with the Vietnam Index (“VN Index”) increasing by 52.8%, and closing at its highest for the last 10 years at 984.24. The liquidity also improved significantly with average trading value per day around US$225m.

Vietnam Enterprise Investments’ NAV per share increased 46.2% in sterling terms

After a relatively quiet 2016, the banking sector was the biggest contributor to 2017’s equity market rally, VEIL’s bank holdings rose by 88.7% (total return in US$ term) year-on-year and were the biggest contributor (+13.7%) to the fund’s overall performance. Both VEIL’s largest bank positions more than doubled during 2017.

Investment manager’s outlook

Comments from Vu Huu Dien, Investment Manager, Vietnam Enterprise Investments Limited:

“We remain bullish on the market outlook for 2018 as we believe that the ongoing development of the market remains a key priority for the Government. Our view is further compounded by the expectation of an accelerated number of privatisation and IPOs, the growth of the futures market following its successful launch in 2017, as well as new product offerings with covered warrants being launched in the first half of 2018 together with market friendly policies.

VEIL will continue to focus on privatisations and IPOs in 2018. In the near-term, three companies in the energy sector, namely Binh Son Refinery (US$3.2 billion market capitalisation), Petro Vietnam Power (US$1.5 billion market capitalisation) and Petro Vietnam Oil (US$0.9 billion market capitalistion) are of particular focus to VEIL.

We will continue to apply fundamental analysis to select stocks. We believe that our emphasis on choosing fundamentally sound stocks at reasonable valuation yields better results over the medium to long term and better fit our mandate. Finally, we look forward to working closely with our investee companies as we continue to deliver strong returns and unlock more value for shareholders.”

VIEL : Vietnam Enterprise Investments’ NAV per share increased 46.2% in sterling terms