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Vietnam Enterprise Investments Ltd on Wednesday said net asset value declined over 2022 as it blamed ‘precipitous’ market decline tracking with increased global risk aversion. The closed-end fund primarily investing in Vietnamese-listed equity said NAV per share on December 31 fell 36% to $7.85 from $12.21 a year prior, with a total NAV of $1.6 billion. It said its NAV per share performance was positive 16% and 11% over three and five years respectively, outperforming the Vietnam Index of positive 7.6% and 7.0% respectively. Portfolio Manager Dien Vu said: ‘Domestic pressures on the economy that emerged due to a weaker currency, imported inflation, and local rate hikes pushed money from the market onto the sidelines. Vietnamese sentiment however soured more than the global trend and arguably reached peak fear in Q4 2022 due to unintended consequences from policy decisions aimed, ironically, at improving the robustness of the capital markets. ‘Despite this, the economy saw impressive [gross domestic product] growth of 8.0%, the highest in ten years. We have reason to believe the worst is behind us and that a repeat of the events that plagued market sentiment in 2022 is unlikely. Local political events that caused the market to decouple from major global indices have been addressed, and new government initiatives are currently helping to reverse both cause and effect of these homegrown themes, and at serious pace.’ Vu also said amendments to Decree 65 were aimed at reopening the bond market to ease corporate restructuring. More recently, he added Decree 26, which addresses the loan-to-deposit ratio in the banking system and previously expected to remain unchanged, now seems to be showing signs of loosening. This is intended to support system liquidity and create a calmer environment within the banking sector, said Vu, adding: ‘For now, we can see the government’s trepanning of the 2022 liquidity headaches is working, this will help the real estate and banking sectors avert crisis to slowly gain momentum, which together make up over half the Vietnam Index.’ Looking ahead, Vu said looking past ‘the short-term fog volatility is crucial’ for accumulating high-quality stocks for the medium-to-long term as the Vietnamese market moves from a beta to an alpha one. Shares in Vietnam Enterprise were up 1.4% to 617.20 pence each in London on Wednesday morning. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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