VSAF is a domestic fund for foreign investors with initial investment capital of $5 million and will be the second domestic fund on the market willing to consider investing in companies with less than $50 million in market capitalization.
The 2016 Investor Conference, VinaCapital’s eleventh such event, was held at the Park Hyatt Saigon in Ho Chi Minh City on October 13 and covered a range of topics, including macro-economic issues, private equity, capital markets and venture capital, and how international investors can participate in Vietnam’s growth.
VinaCapital said it believes that the country’s stock market currently has a Price/Earnings (P/E) ratio of some 16 times, which makes shares relatively cheap compared to other countries in the region. The gap will narrow, however, when Vietnam’s stock market develops in breadth and depth.
While the boom in 2007 was a breakthrough for the stock market due to the large flow of capital, the last five years has seen a focus on development in depth and numerous reforms have helped the stock market eke out a stable recovery.
The total market value on both the Hanoi Stock Exchange (HNX) and the Ho Chi Minh Stock Exchange (HSX) currently stands at $69.5 billion, with 690 listed companies. Foreign investors are paying more and more attention to the market in the expectation that there will be more companies equitized and the cap on foreign ownership in public companies will be lifted.
According to VinaCapital, the lifting of foreign ownership caps and the speeding up of State-owned enterprise (SOE) equitization along with a stable macro-economic environment will be a catalyst supporting the development of the country’s stock market in the time to come.
VinaCapital CEO Mr. Don Lam believes that “the government’s push to accelerate the sale of its stakes in a number of marquis companies, including Vinamilk - a transaction in which VinaCapital Corporate Finance is serving as an advisor - is creating new opportunities for both local and foreign investors.”
Combined with numerous other reforms and a solid underlying macro-economic landscape, Vietnam’s markets are poised to expand. “I look forward to welcoming our investors to Vietnam and experiencing the country’s amazing growth and development first-hand,” Mr. Lam added.
VinaCapital CIO Mr. Andy Ho told local media recently that VinaCapital may establish a new fund with more than $200 million to invest in private companies with high potential in Vietnam.
Founded in 2003, VinaCapital is a leading investment and asset management firm headquartered in Vietnam, with a diversified portfolio of $1.4 billion in assets under management. Its expertise spans a full range of asset classes including capital markets, private equity, venture capital, real estate and fixed income.
It has three closed-ended funds trading on the London Stock Exchange (AIM): VinaCapital Vietnam Opportunity Fund Limited, which trades on the Main Market, and VinaLand Limited and Vietnam Infrastructure Limited, which trade on the AIM.
VinaCapital also manages the Forum One - VCG Partners Vietnam Fund, Vietnam's largest open-ended Undertakings for Collective Investment in Transferable Securities (UCITS)-compliant fund. It also co-manages the DFJ VinaCapital L.P. technology venture capital fund with Draper Fisher Jurvetson and holds a stake in VinaWealth, a locally incorporated fund management company.
To trade on UPCoM, companies need only meet simple conditions, like charter capital of over VND10 billion ($448,200) and more than 100 investors. UPCoM is considered a market of some potential, with the number of listed companies increasing from just 150 in 2014 to 350 by September this year.
