Investment funds shift focus on to mid-cap stocks

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

VinaCapital last week purchased over 11.18 million shares of An Duong Thao Dien Joint Stock Company (HAR), an equivalent of 11.06 percent 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 2,660 VND at the end of last year to 10,500 VND (0.46 USD) a share on October 31 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 percent, 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 percent this year, being traded at around 26,000 VND per share on the HCM Stock Exchange. The foreign holdings in the company have reached the limit of 49 percent 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 percent, while Aquila SPC Ltd and Idris Ltd bought 3 million NKG shares. These investment funds hold a combined 22.41 percent 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 35,000 VND apiece, 30 percent higher than the selling price of 27,000 VND 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 percent and relinquishing its position as a major shareholder of Hoa Sen Group.

In terms of business activities, Hoa Sen Group reported net revenue of 26.15 trillion VND and net profit of 1.33 trillion VND in the fiscal year 2016-17 (from October 1, 2016 to September 30, 2017), fulfilling 114 percent and 81 percent 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 percent to 4.94 percent, while it offloaded 854,900 HBC shares, decreasing its ownership from 14.08 percent to 13.32 percent.

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 percent in value since first trading on the Unlisted Public Company Market (UPCoM) in January this year.-VNA