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Vietnam Enterprise Investments Ltd on Friday reported its net asset value in the third quarter underperformed against its benchmark, the Vietnam Index.
The closed-end fund focused on investing in Vietnamese equities said NAV per share at September 30 per share fell 28% to $8.79 from $12.21 at December 31, 2021.
In the third quarter that ended September 30, NAV fell 9.9% from June 30, compared to a 7.3% fall of its Vietnam Index benchmark.
"In September, Federal Reserve rate hikes began to bite, and the State Bank of Vietnam felt obliged to follow, not only to guard the country against inflation but also in an attempt to protect the currency, which was down 4.3% for the year as at the end of the third quarter and 8.2% year to date at the time of this release," Portfolio Manager Dien Vu explained.
In October, Vietnam's State Bank raised the annual refinancing rate to 6.0% from 5.0%. On Wednesday, the US Fed increased its interest rate by 75 basis points to a benchmark lending rate to a 14-year high of 3.75% to 4.00%.
Vietnam Enterprise's investment manager lowered its earnings growth forecast to single-digits from 11%.
"As we look ahead to 2023, the investment manager expects corporate earnings to remain positive but with flat to single-digit average earnings per share growth across the market," said Portfolio Manager Vu.
Further, Vu said that the company maintains its "cautious market view due to the freezing of bond issuance, lack of new credit quota at banks, and resultant lack of financing for companies - especially property developers."
Vietnam Enterprise shares were virtually flat at 560.22 pence each in London on Friday morning.
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