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VGF, VEIL continue expanding in VN until 2015, 2017

VGF, VEIL continue expanding in VN until 2015, 2017

Sunday, October 07, 2012, 14:00 GMT+7

Vietnam Growth Fund Limited (VGF) and Vietnam Enterprise Investments Limited (VEIL) will have their operations in Vietnam extended until 2015 and 2017, respectively.

The decision has resulted from the two funds’ annual shareholders meetings, in which their shareholders had vetoed the dissolution of the funds.

Moreover, they have also approved the extension of time between two vote on VEIL and VGF operations from 2 years to 5 years and from 2 years to 3 years, respectively.

Thus, the operations of VGF and VEIL will continue to 2015 and 2017 before the shareholders make any new decisions.

The shareholders of the two funds, investing in listed stocks managed by Dragon Capital, have also adopted most of the contents proposed by their board of directors.

Hart Giesecke, president VEIL, said the latest move of the two funds’ shareholders have showed that the shareholders of the fund remains optimistic about the business prospects in the Vietnamese market.

"These results reflect the confidence of the shareholders on the management ability of Dragon Capital as well as confidence in Vietnam, a potential market foreign investment," said Dominic Scriven, general director of Dragon Capital.

“We have to start from the curves on the market, including the situations of mergers and acquisitions (M&A),” Dau Tu newspaper quoted Dominic Scriven as saying at the conference entitled “Private investment capital in South East Asia” held in Ho Chi Minh City last month.

“In addition, investors need to look carefully into the real economy in each country. For example, Vietnam still has potential in the fields of banking and finance and retail,” he added.

Loss-making operations

As of August 30, the total net asset value (NAV) of VEIL and VGF reached $587.36 million, down $19.75 million from August 2, according to Dragon Capital.

Of which, the NAV of VEIL posted a fall of up to $18.29 million, down 4.4 percent.

The prices of stocks in the portfolio of listed shares saw a strong fall after the arrest of two banking tycoons, Nguyen Duc Kien and Ly Xuan Hai, and therefore the NAV of these two funds declined.

From a gain of $37 million in the first two weeks of August, the NAV of these two funds decreased $19 million from early August.

VEIL is now the second biggest foreign fund operating in Vietnam’s stock market, after VOF fund of VinaCapital, according to the statistics of Rothchilds Securities Co.

VEIL’s NAV in its investment in ACB-coded shares dropped $15.69 million when the proportion of ACB shares in the fund’s NAV decreased from 17.22 percent in August 2 to 14.03 percent on August 30.

After the arrest of Kien and Hai, the price of ACB-coded shares tumbled 22.8 percent, from VND25,700 each on August 21 to VND20,000 each on August 30, with four sessions of hitting the floor price and marked the second biggest fall in August on Hanoi Stock Exchange (HNX).

In contrast, with the strongest gain of 19.5 percent on the southern bourse in August, the NAV of the investment of both VEIL and VGF in VNM-coded shares increased by $8.49 million and $6.29 million in the period.

VNM shares accounted for about 55 percent of the total portfolio of the two funds.

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