Net Asset Value(s) (2038D)
14 5월 2012 - 3:01PM
UK Regulatory
TIDMVPF
RNS Number : 2038D
Vietnam Property Fund
14 May 2012
Vietnam Property Fund Limited
"VPF" or "the Company"
NAV and April 2012 Update
Fund NAV Performance
The NAV per share closed at US$ 0.794 on 27 April 2012.
Investment Climate
Most observers expected the petrol price increase in March to
have a major impact on April's month on month ("m/m") inflation and
anticipated inflation m/m to reach 0.8%-1.2% whilst we forecasted
0.3%-0.5%. However, the actual April m/m inflation surprised all
and came out at only 0.05%, the lowest m/m inflation in 36 months.
Given the high base effect the inflation year on year ("y/y")
continued to drop, from 14.1% in March to 10.5% in April. Food and
foodstuffs were down 0.8% m/m thanks to favorable food supply and
weak aggregate demand, causing prices of two key items, namely rice
and pork, to decline. We expect inflation to reduce further to 8.5%
y/y in May and 7.5% y/y in June.
According to estimates by the Ministry of Trade, April's trade
deficit came in at $400m, resulting in a trade deficit of just $18m
after 4 months. April export was reported at $8.6bn bringing export
year to date to $33.4bn, or +22.1% y/y. Foreign Direct Investment
("FDI") enterprises were the key contributors, posting a growth of
36.4%, while local enterprises edged up by only 4.3%. April import
was estimated at $9bn resulting in import year to date of $33.6bn,
or +4.4% y/y, with local enterprises showing a decline of 11.9% and
FDI enterprises an increase of 25.9% y/y. 12m rolling core deficit
as a result continued declining from $6bn in March to $5.1bn in
April, implying that our trade deficit forecast of $7bn for 2012
may now be conservative.
Economic data is pointing to an economy in stagnation, a rapidly
declining inflation and local trade companies losing market share
to FDI companies. Even though deposit rates are capped at 12%, most
banks continue to command lending rates of 17-19%. Whilst this
gives banks a very high net interest margin ("NIM") it severely
hurts enterprises. The State Bank of Vietnam ("SBV") therefore has
issued Circular 14 to apply a lending cap for specific sectors
which is equal to the savings deposit rates for more than 1 month
(currently at 12%) plus 3%. Beneficiaries of the lending cap are
agricultural companies, processors of export products, small and
medium enterprises (SMEs) in labour intensive industries and
enterprises involved in supporting key industries. Even though
lending rates remain high, interbank rates have fallen to a very
low level: O/N rate is just 4-5% while the 1month rate is 8%,
implying that banks have ample liquidity. We therefore believe that
the SBV should further accelerate the bank restructuring process in
order to eliminate weak banks and to thereby allow rates to drop
faster. On the fiscal side, the Government is planning to propose a
support package worth $1.4bn to the National Assembly for
cash-strapped enterprises which includes a delay or a reduction in
corporate income tax (CIT), a deferring of value-added tax (VAT)
and tax exemptions.
Investment Update
After a fairly torrid year in terms of performance for our
listed equity portfolio in 2011, we have seen a significant
recovery in all of our equity positions with a particularly strong
performance in April. Our view has been that the real estate sector
was overly affected by market sentiment and the recent bounce back
has gone someway to vindicate this view. For the month of April we
have seen a significant gain of 25.1% in US$ terms for our listed
holdings with DIG gaining 35%, BCI gaining 24% and, perhaps most
surprisingly, SCR gaining over 70%. The year to date performance
equates to a gain of nearly 72% for our listed holdings which is
more than twice the gain seen for the whole VN Index for the same
period. Whilst the real estate sector still has its issues this is
the first indication that investor confidence is beginning to
return. It is worth noting that the listed element of the portfolio
is 19% of the portfolio so the performance of the fund as a whole
has been obviously more muted at 9% year to date. We have, however,
managed to break through the $70m mark in terms of NAV with the NAV
per share now close to $0.80. We are delighted that the market is
now moving in the right direction.
Our cash position is providing us with access to a lot of
opportunities as high interest rates continue to cause problems for
a lot of land owners and developers in the country. We continue our
efforts to get further deals completed before the year end. We will
report more on this in the coming months.
For further information including the full April Monthly Report
please visit - www.vietnampropertyfund.com or contact:
Enquiries:
Rachel Hill
Dragon Capital Markets (Europe) Limited | Tel: +44 79 71 214
852
Freddy Crossley
Seymour Pierce Limited (Nominated Adviser and Broker) | Tel: +44
20 7107 8000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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