Vietnam Overseas

The Anpha Capital Group (ACG) has announced the listing of Vietnam Equity Holding (VEH) and Vietnam Property Holding (VPH) on the Frankfurt market, Germany , and the Xetra electronic stock exchange market of Frankfurt on November 28 and 30.

They are Viet Nam ’s first investment funds listed in the Frankfurt stock market. Louis Nguyen, ACG Managing Director, said that the listing on the European stock market will help the two funds improve their payment capacity and transparency to meet world investors.

Alpha Capital is a fund management company specializing in Viet Nam with its focus on the equitisation of State-owned businesses, the OTC market, purchase and sale of private businesses and listed shares.

VEH and VPH are expected to close their second funds within 10 days, totalling about 200 million USD.

The Vietnamese Ministry of Finance is mulling a plan to submit to the government of Vietnam to allow the establishment of wholly foreign invested management funds, local Securities Investment newspaper said recently.

The ministry move is aimed to help legalize operations of foreign funds, which are now operating under representative offices, and create a fair playing field for investors in Vietnam now, it noted.

However, opening room for foreign funds means local funds will face greater pressures. To restrain this, the ministry will propose the government to apply limit on operations conditions, it said.

To establish a fund in Vietnam, foreign investment funds must be three-year experienced and manage $500 million assets.

The ministry said so far 505 foreign institutional investors have operated in Vietnam and hold listed shares with the market value of $8 billion.

The statistics of the ministry showed 35 representative offices have received licenses to operate in the local market.

However, the World Bank said foreign investors hold a fourth of the official market capitalization, or $5.3 billion.

Vietnam shares closed up 3% Wednesday after the market dipped for the past several weeks on an emerging capital inflow from Vietcombank’s IPO as state media reported because investors will bid a limited number of Vietcombank’s shares. (Securities Investment)

Foreign investment funds complain that they cannot purchase VND at this time to serve their disbursement needs for investment deals.

Trinh Viet Cuong, Representative from Japanese owned Asiavantage investment fund, said that since November 2007, his fund has been queuing up to buy VND for the second time in the year (the first one was in April, 2007).

A representative from another foreign fund said that he had to pay an additional fee of 0.4% of total transaction value to successfully purchase VND.

In general, investment funds always keep their money in several hard foreign currencies, while not keeping VND for fear of high inflation, and they only convert the money into VND when they need VND to make transactions.

“Previously, we could decide when to buy VND, but we cannot do that these days, because banks can refuse to serve us. Therefore, we have to buy VND at the time set by banks and at the exchange rates set by banks,” said Mr Cuong from Asiavantage.

Mr Cuong related that in order to purchase 3mil shares of Hoang Anh Gia Lai Group, Asiavantage had to seek to buy VND one month before the transaction time for fear that it cannot arrange enough VND right after the negotiations between the fund and Hoang Anh Gia Lai wraps up.

“We had to buy VND even when we knew that the VND/US$ exchange would go down,” he said, adding that the fund incurred the loss of several billion VND.

VinaCapital and Dragon Capital have not facing such big difficulties like Asiavantage, because they can sell the shares they hold to get VND and restructure their portfolio investment. However, Dominic Scriven, Managing Director of Dragon Capital, acknowledged that it is now not easy to buy VND as previously.

According to Vu Thanh Tu Anh, Lecturer at Fulbright Teaching Programme, the fact that investors find it difficult to buy VND has been anticipated. The State Bank of Vietnam has been trying to tighten the monetary policy in order to reduce the VND in circulation, the move that aims to curb inflation.

Mr Anh, on one hand, acknowledged the necessity of the monetary policy tightening, on the other hand, said that the over-tightening would cause shocks to the stock market and real estate market, which may slow down the economic growth. (Securities Investment Newspaper)

Ten local institutions officially became members of Anpha Capital’s two new funds, the Anpha Capital Equity Fund (ACE) and Anpha Capital Property Fund (ACP) following a signing ceremony on Dec 28.

The 10 include Kien Long Bank, Development Investment and Construction Co (DIC), Hanoi Real Estate Trading Floor, Fruit and Vegetables Port Co and Industrial Park Investment and Construction Company.

These 10 companies will, under the signed contracts, each invest VND8 billion (US$500,000) in each fund. A company will invest a total of VND16 billion for both funds.

Anpha Capital Management Company General Director Bui Cong Giang expects official inauguration of the funds will be held in the first quarter of 2008.

The management company was established by investment bankers Anpha Capital Group one year ago. The company has already raised from abroad $125 million for its two initial funds, Vietnam Equity Holding (VEH) and Vietnam Property Holding (VPH). Both funds are listed on the Frankfurt Stock Exchange.

Giang said around 25% of the $125 million were invested in companies including Dream House Mekong and DIC.