Investment funds shift focus to mid-cap stocks

Investment management funds have been active in trading on the HCM Stock Exchange recently, focusing on mid-cap stocks.

The Thao Dien real estate area. - VNS Photo Viet Thanh

VinaCapital last week purchased over 11.18 million shares of An Duong Thao Dien Joint Stock Company (HAR), an equivalent of 11.06 per cent of total outstanding shares, and became the second largest shareholder of the real estate developer after its chairman Nguyen Gia Bao.

Shares of HAR have increased by nearly four fold this year, soaring from just VND2,660 at the end of last year to VND10,500 (US$0.46) a share yesterday with an average trading volume of nearly 1.4 million shares per session.

Meanwhile, an investor group related to Dragon Capital raised its stakes in Khang Dien Investment & Trading House JSC (KDD) to 17.63 per cent, an equivalent of 57.8 million shares. Both Grinling International Limited and Vietnam Enterprise Investments Limited bought a combined 3.8 million KDH shares last week.

In a related development last week, property fund Vietnam Ventures Ltd picked up 3.8 million KDH shares.

KDH’s share price has expanded 30 per cent this year, being traded at around VND26,000 per share on the HCM Stock Exchange. The foreign holdings in the company have reached the limit of 49 per cent after recent active trades by foreign funds.

Besides KDH, Dragon Capital’s investor group also bought a big stake in Nam Kim Steel JSC (NKG). Amersham Industries Limited purchased 7.5 million NKG shares, lifting its holding here to 6.51 per cent, while Aquila SPC Ltd and Idris Ltd bought 3 million NKG shares. These investment funds hold a combined 22.41 per cent stake in the company.

This is part of total 30 million shares the steelmaker issued to investors in a private placement last week. NKG’s share is being traded around VND35,000 apiece, 30 per cent higher than the selling price of VND27,000 a share in the private placement.

Dragon Capital’s funds offloaded shares of another steelmaker, Hoa Sen Group (HSG). Norges Bank sold 330,000 HSG shares, reducing its ownership to 4.96 per cent and relinquishing its position as a major shareholder of Hoa Sen Group.

In terms of business activities, Hoa Sen Group reported net revenue of VND26.15 trillion and net profit of VND1.33 trillion in the fiscal year 2016-17 (from October 1, 2016 to September 30, 2017), fulfilling 114 per cent and 81 per cent of its yearly goals, respectively.

Another foreign fund from Finland, Pyn Elite Fund (Non-Ucits), has restructured its portfolio last week. It reduced holdings in two construction companies – Kinh Bac City Development Share Holding Corp (KBC) and Hoa Binh Construction Group (HBC).

Pyn Elite Fund sold two million KBC shares, reducing its stake from 5.38 per cent to 4.94 per cent, while it offloaded 854,900 HBC shares, decreasing its ownership from 14.08 per cent to 13.32 per cent.

Meanwhile, Pyn Elite Fund purchased shares of Fecon Corp (FCN), Construction Investment Corporation 3-2 (C32) and Van Phat Hung Corp (VPH). It can be seen that the fund has reduced its investment in large-cap construction companies while shifting focus on to mid-cap firms. They are all mid-sized construction and real estate companies.

In the opposite direction, domestic investment funds such as Binh Dinh Investment and Development Fund sold nearly 10.5 million shares of Binh Dinh Pharmaceutical and Medical Equipment JSC (DBD) after shares gained 49 per cent in value since first trading on the Unlisted Public Company Market (UPCoM) in January this year.

Source VNA