An overview of Melosa Gargen project in HCM City developed by Khang Dien House Trading and Investment JSC (KDH). CTBC Vietnam Equity Fund has recently bought 220,000 shares of KDH (Photo: khangdien.com.vn)Hanoi (VNS/VNA) - Many Chinese funds are pouring capital into theVietnamese stock market because of low valuations and further loosening offoreign ownership in the near future.
Taiwan-based CTBC VietnamEquity Fund has registered to buy 21 million VFMVN Diamond ETF fundcertificates from September 7 to October 6 to increase its ownership. BesidesCTBC Vietnam Equity Fund, no foreign fund has bought this fund’s certificates.
CTBC Vietnam Equity Fund has also recently bought 220,000 shares of Khang Dien HouseTrading and Investment JSC (KDH).
It is a newbie in the Vietnamese capital market, established at the end ofAugust this year. The fund is owned by CTBC Investments, one of the leadingasset management companies in Taiwan. Dragon Capital is the advisor for thisnew fund. Its committed capital is 3.7 trillion VND (160 million USD).
Dragon Capital said it would support CTBC Vietnam Equity Fund to build aportfolio of Vietnamese listed stocks, providing ongoing research andrecommendations on stocks. The fund targets to invest in companies listed onHoSE, HNX with potential growth, besides fund certificates.
CTBC Investments is a member of CTBC Financial Holdings, founded by the Koofamily, one of the most powerful families in Taiwan. CTBC Financial Holdings isone of the leading financial groups in Taiwan managing eight business segmentsincluding banking, securities and venture capital.
By the end of 2019, CTBC Financial Holdings had total assets ofmore than 207 billion USD. Some major shareholders of this unit are SingaporeGIC Investment Fund, BlackRock Fund Advisor, Fubon Life Insurance, The VanguardGroup and Norges Bank.
Norges Bank is Norway's central bank which has invested 500 million USD indozens of blue-chip stocks on the Vietnamese market such as dairy firm Vinamilk(VNM), PetroVietnam Fertiliser and Chemicals Coporation (DPM), steelmaker HoaPhat Group (HPG) and FPT Corporation (FPT), since 2013. However, Norges Bankalways kept the ownership rate of no more than 3 percent in all stocks. DragonCapital is also the portfolio manager of Norges Bank in Vietnam.
Another branch of CTBC Financial Holdings, which has beenpresent in Vietnam since 2002, is CTBC Bank. It is located in HCM Citywith an operating term of 99 years.
In January this year, Tianhong Asset Management, an investment fund owned byAnt Financial - in which Chinese e-commerce giant Alibaba owns 51 percent -launched a domestic investment fund named China QDII to invest in theVietnamese stock market.
During the IPO, the fund raised 200 million yuan (29 million USD).
Tianhong AM manages 48 member funds, investing in big data and AI. AntFinancial has been expanding into Asian and European markets. Some of its big dealsincluded the acquirement of helloPay and investment in Paytm.
In Vietnam, Tianhong AM is reported to have bought eMonkey e-wallet owned byM-Pay, with a holding rate of over 50 percent.
Market analysts said that Chinais on track to overtake the US to become the world's largest foreign investor.
The disruption in the market because of COVID-19 has prompted funds to pourcapital into Chinese stocks and investment funds. Accordingly, raising capitaland setting up a new fund are easier.
Shenzhen PaiPaiWang Investment & Management data shows that in July thisyear, the number of newly opened funds increased to 1,500 funds, higher thanthe total number of 1,217 in the first 6 months.
New capital inflows could give a boost to domestic and neighbouring stockmarkets outside of China including Vietnam.
CTBC Vietnam Equity Fund focuses on Vietnam’s high economic growthopportunities in the future, selecting leading companies with potential forprofit growth. That is the reason why no single stock accounts for more than 10percent of the fund's portfolio.
In Vietnam, the fund targetsfast-growing industries such as domestic consumption, finance and real estate.Meanwhile, Tianhong Asset Management Fund seeks to invest in businesses,start-ups in the e-payment ecosystem, e-commerce, distribution, retail andlogistics.
According to SSI SecuritiesIncorporation, the control over COVID-19 as well as the effectiveness ofstimulus measures by the Vietnamese Government play a decisive role in marketsentiment.
This is still the mainfactor that governs the movements of capital inflow into Vietnam’s stockmarket in the future, SSI said./.
VNA
