On this blog I have mentioned previously a post I made on the Seeking Alpha website in early 2019 when at the time I thought the sizeable falls in Vietnam stocks made them a buying opportunity. Does a similar opportunity now exist today?
VINACAPITAL VIETNAM OPPORTUNITY FUND REVIEW
A couple of weeks into July this year I now notice the falls in the VN-Index are of similar magnitude. I also think now represents a good buying opportunity. I decided to write an update for Seeking Alpha on the VinaCapital Vietnam Opportunity Fund.
Due to the guidelines from Seeking Alpha when I let them have exclusive access to the article I can’t copy and paste the entire article here.
However I can provide a very brief excerpt and link to the article. It is my understanding that those who are free members of Seeking Alpha have access to about 5 articles a month before the paywall comes up. Therefore I thought it was useful to share the link on my blog here, as it should be simple to sign up if you haven’t already got access. Apologies though if you happen not to want to be a free Seeking Alpha member or have hit your article limit for the time being.
Nonetheless I thought my readers might be interested in my perspective with the Vietnam stock market falls of 2022 compared with other years, so I guess you still get a feel for the conclusion I am reaching.
Probably the main reason in giving the article to Seeking Alpha as my blog hardly has any audience so I don’t get any comments pushing back with the bearish case. Whereas Seeking Alpha has a very large audience to reach. The internet being the internet there is a fair chance many commenters there might want to pick holes in all my arguments!
As an investor, it is always good to pay attention to the other sides of your investment position.
Below is for those who can access and are interested:
VinaCapital Vietnam Opportunity Fund: Another Vietnam Market Correction, Buy The Dip
- Vietnam’s stock market has suffered a substantial decline in the first half of 2022, for reasons not to be too concerned with.
- From a quantitative viewpoint and growth outlook, Vietnam stocks are cheap.
- Vietnam increasingly is seen as an attractive location to establish a manufacturing base.
- The discount to NAV for the VCVOF CEF remains wide despite the advantages compared to Vietnam ETFs.
I last discussed VinaCapital Vietnam Opportunity Fund (OTCPK:VCVOF) back in 2019. In my previous article, I focused more on the longer-term history of the fund and macro drivers in Vietnam. At the time, Vietnam stocks had corrected some 25%, so investors buying the dip back then would have achieved quite good returns by now.
Now, a similarly attractive entry point into the stock is opening up thanks to large declines in Vietnam stocks in 2022. I shall now focus on some of the key events that have unfolded over the last three years that still favor exposure to Vietnam stocks via this fund.
Why are Vietnam stocks falling in 2022?
In the first six months of 2022, the VN-Index fell circa 20%. While Vietnam stocks have largely mirrored the falls seen on Wall Street this year, there are also local factors at play. I shall now list such factors that have contributed to the falls.
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