VF4 may double its cash holding

From now till June when the Vietnam stock market goes up, Vietnam Blue-chips Investment Fund (VF4) will offload profitable stocks to increase its cash holding to 10-15 percent.



On March 24, at the shareholders’ meeting of VF4, Tran Thanh Tan, VF4′s general director said that in 2011 his fund will pursue the value investment strategy via seeking listed shares with high liquidity.



VF4 will take the more advantageous conditions such as issuing price, directly provided corporate information and opportunities to join more actively the operations of listed and non-listed firms as the role of a strategic shareholder through the odd share issuances.



Currently, the total amount of cash held by VF4 remains low, accounting for about 5-7 percent of its total assets. From now to June, when the stock market goes up, VF4 will sell profitable share codes to increase its cash holding to 10-15 percent.



This amount of cash is mainly to join the IPO of enterprises operating in sectors such as energy and telecommunications that are scheduled to take place in Q4.



In 2010, the fund’s loss from investment operations was 105.1 billion dong mainly due to non-done losses of 161.4 billion dong caused by the decline of stock prices. The fund’s profit was 33.3 billion dong. Therefore, in 2010, VF4 posted a gross loss of 123.2 billion dong.



The fund’s net asset value (NAV) till December 31, 2010 reached 739.6 billion dong, equalling to 9,171 dong per fund certificate (excluding the 10 percent dividend being paid in April 2010).



The discount of NAV on the average market price in 2010 was about 34 percent, higher than the average discount of 30 percent in 2009.



The representative of Saigon Securities Inc (SSI) with the holding of 20 percent stake proposed the fund’s management board to consider about the liquidation for the fund because that such high discount will bring the benefit to the shareholders.



Dominic Scriven, Vietfund Management (VFM)’s chair of director board said the buy-back of fund certificates to reduce the NAV discount compared to the market prices can not be done due to the regulations of law.



Another solution given is that VF4 will switch from a close-ended fund to an open fund when having the information on the fund management transfer that will be passed by the State Securities Commission (SSC) in July.

Tags: Vietnam business news, vietnam enterprices

Posted by VBN on Mar 25 2011. Filed under Enterprises. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry