VFMVF1 – 04/2016
In April, VF1 has its NAV grown by 4.2% with the main contribution from the recovery of large-cap stocks such as VNM (+3.7%), FPT (+3.2%), SKG (+14.2%), VCB (+12.2%), GAS (+24.4%), HSG (+36.2%). In which, HSG, the top gainer in April, was benefited from the sharp increase of Chinese steel prices amid the investigation of Ministry of Industry and Trade regarding the anti-dumping tax on galvanized steel imported from China (including Hong Kong) and South Korea, together with the significant surge in domestic demand. As a result, for the first two quarters of the fiscal year 2015-2016, HSG had estimated profit of VND 605 billion, fulfilling 92% of the plan, growing 151% over the same period last year.
VN1-Benchmark (which accounts for 80% growth in VN-Index) has appreciated higher than VF1 return due to the fact that the weight of some big-caps like VCB and GAS in VN-Index is much higher than the weight of those stocks in VF1 while these two have increased strongly in April, by 12.2% and 24.4% respectively. This abnormal return in these two stocks resulted from the foreign fund flowing into high weighting stocks as well as the market sentiment of oil price recovery. The abnormal return is considered to be short-term nature in comparison with companies’ fundamental change. Accumulative from the beginning of 2016, VF1 grew 5.3%, outperforming its benchmark by 2.4%.
When VN-Index was gradually toward 600 pts, VF1 realized profit of those reached target, increasing cash position to 23% NAV the end of April, from 17.4% NAV at the end of March, which is planned to be allocated in new investment opportunities. At the end of April, the largest holding of VF1 is still in Food & Beverage industry with VNM accounted for 16.5% of NAV. VNM has just announced its first quarter earnings result in 2016 with impressive profit growth rate of 38% compared to the same period last year and propose a 60% cash dividend together with a 40% advance payment of next year dividend in this year 2016. Besides, VNM has updated its AGM materials with a proposal of 20% stock bonus and un-restricting the room of foreign ownership. We believe that the stocks with decent business growth and healthy financial condition will attract the foreign investment as well as having its market price appreciate in the future.
