China Trust Vietnam Opportunity to invest $163mln in Vietnamese securities

The China Trust Vietnam Opportunity fund from Taiwan (China) will continue to raise investment capital in Taiwan (China)'s currency  (NT$) in Vietnam.

This will be the fund’s fifth capital increase, with a total of around NT$5 billion or $163 million (VND3,824 billion). Following the capital increase, the fund’s total capital mobilization will be about NT$16.5 billion, or $537.9 million (VND12,616 billion).

As of the end of the first quarter of this year, China Trust Vietnam Opportunity, owned by CTBC Investments, had grown to NT$22.78 billion ($742.7 million), making it CTBC’s second-largest international equity fund in China.

According to the fund, Vietnamese equities have risen by more than 4 per cent this year, leading ASEAN stock markets.

According to Mr. Zhang Chenwei, Director of China Trust Vietnam Opportunity, following the release of the first quarter business results, most investors continued to wait for the stock market to see reduced liquidity, resulting in ongoing selling pressure in heavy stocks.

Regarding the market outlook, Mr. Zhang Chenwei believes that Vietnamese stocks remain volatile and weak since investor confidence has not been restored, but the medium and long-term economic outlook remains unchanged.

According to China Trust Investment Trust, Vietnam possesses many advantages, including strong GDP growth, low inflation, and a stable currency. The emerging economy also has among the most free trade agreements (FTAs) in the world. Most notably, the EUVFTA agreement between Vietnam and the EU has come into effect and promises to boost the domestic economy.

From August 17-21, 2020, CTBC Investments raised capital for the first time for China Trust Vietnam Opportunity to invest in Vietnamese stocks. It was the first fund to pour capital into Vietnam in NT$, under advice from Dragon Capital.

The fund aims to invest in companies with growth potential and listed on the Ho Chi Minh Stock Exchange (HoSE) or the Hanoi Stock Exchange (HNX). Its portfolio also includes VFMVN Diamond ETF - an ETF certificate modeled after the VN Diamond Index built by HoSE.

Vietnam’s economy grew steadily, at 6-7 per cent a year, until it hit the “Covid-19” barrier. Prior to the pandemic, economic growth had slowed significantly but the country remained one of only a few posting solid growth.

According to Mr. Zhang Chenwei, Vietnam is on the same economic path as China and Taiwan (China), and the next ten years will be a golden era for its economy.

CTBC Holdings owns 100 per cent of CTBC Investments, which was founded by the Koo family, one of the most powerful families in Taiwan (China) and the richest in Asia. It is one of the leading financial groups in Taiwan (China). By the end of 2019, CTBC Holdings had total assets of more than $207 billion.