Thai people “turned around” on Vietnam’s stock exchange: Holding a series of leading manufacturing enterprises, becoming the core force for ETFs

Large corporations, investment funds and even individual Thai investors are holding billions of dollars of Vietnamese stocks in different ways.

Referring to Thailand, surely people will immediately think of Vietnam’s “heavyweight” opponent at the regional sports events. However, few people notice that the country of the Golden Temple is still in the top of the list of countries investing in Vietnam. Not only investing directly, Thai investors also poured billions of dollars into Vietnam’s stock market.

Holding a series of large Vietnamese manufacturing enterprises

Talking about the “big games” of the Thai people, it is impossible to ignore the acquisitions of leading enterprises in the field of manufacturing on the stock exchange. The most notable is the “blockbuster” Sabeco (SAB) to Thaibev of billionaire Charoen Sirivadhanabhakdi after the Ministry of Industry and Trade divested at the end of 2017.

At that time, Vietnam Beverage – a subsidiary of Thaibev spent nearly 5 billion USD to buy the whole lot of 343.66 million SAB shares, thereby officially taking control of the largest beer company in Vietnam. After the hit deal, SAB continuously dropped and is still struggling to find its old glory. The value of SAB shares held by Thaibev also “evaporated” by nearly half, to about $2.7 billion .

About half a decade earlier, the shadow of billionaire Charoen Sirivadhanabhakdi appeared in the “giant” of Vietnam’s dairy industry Vinamilk (VNM) after TCC Holding completed the acquisition of Fraser & Neave. After SCIC’s divestment and multiple ownership increases, members of Fraser & Neave hold a total of more than 20% of Vinamilk’s capital, just behind State shareholders. It is estimated that the number of shares of VNM in the hands of the Thai billionaire is currently approximately $1.2 billion .

In the same year 2012, another Thai “giant”, SCG Group, also started to acquire Binh Minh Plastics (BMP) – one of the largest enterprises in the field of manufacturing and distributing plastic pipes in Vietnam. After SCIC’s divestment in March 2018, Nawaplastic held 49.9% of BMP’s shares and still continued to buy and collect to dominate. The group from Thailand currently holds nearly 55% of BMP shares, equivalent to a market value of about 150 million USD .

After Binh Minh Plastics, SCG Group through its member company TCG Solutions continues to acquire Bien Hoa Packaging (SVI) . The predecessor enterprise was the first corrugated paper packaging factory in Vietnam. Up to now, TCG Solutions holds a 94% stake in SVI, equivalent to a market value of about $29 million .

By early 2022, Thai multinational conglomerate Indorama Ventures, through its subsidiary Indorama Netherlands BV, acquired 97.8% of the capital of Ngoc Nghia Plastic (NNG) from VinaCapital and its leaders. Ngoc Nghia Plastics is a long-term partner of big names like Unilever, Coca-Cola, Pepsi, Vinamilk,… with a market capitalization of more than VND 1,500 billion. Thai investment in NNG is estimated to have a market value of about $64 million .

A few months ago, one of Thailand’s largest enterprises in the fields of industry, agriculture and food processing, CP Group, also increased its ownership in Fimex (FMC) to approximately 25 %. Fimex, formerly a state-owned enterprise specializing in processing frozen shrimp for export, was established in 1996 and has been operating under the joint stock model since 2003. It is estimated that CP Group’s investment in FMC currently has a market value. about 28 million USD .

Many investment funds entered

Not only large corporations, many large Thai investment funds are also investing in Vietnamese stocks. In which, K-VIETNAM (K Vietnam Equity Fund) managed by Kasikorn Asset Management is one of the largest funds with NAV of over 7.4 billion Bath (~ 222 million USD) . The fund specializes in investing in individual stocks in Vietnam market in which the top 5 portfolios at the end of March are MWG (7.13%), FPT (7%), VHM (7%), VCB ( 6.27%) and ACB (5.41%).

Another Thai investment fund, PRINCIPAL VNEQ-A (Principal Vietnam Equity Fund) with a size of 6.9 billion Bath (~ 208 million USD) is also present in Vietnam. The top 5 largest investments of the fund at the end of the first quarter of 2023 include FPT, HDB, HPG and 2 fund certificates DCVFM VNDiamond ETF and SSIAM VNFinLead ETF.

More modestly, Bualuang Vietnam Euqity Fund (B-Vietnam) with NAV 2.66 billion Bath (~$80 million) is also investing in Vietnamese stocks. The Fund targets stocks that benefit from urbanization trends, the wave of technology development as well as the hot spots to attract international investment flows. The top 5 portfolios of the fund are currently FUESSVFL, VCB, VRE, HPG, and FPT fund certificates, respectively.

Following are two funds managed by ASP including ASP-VIETRMF (Asset Plus Vietnam Growth RMF Fund) and ASP-VIET (Asset Plus Vietnam Growth Fund) with a scale of 612 million Bath (~ 18.4 million USD) and 612 million Bath respectively. 2 billion Bath (~61.5 million USD) . The portfolios of the two funds are quite similar, mainly pouring capital into funds investing in the Vietnamese market such as Vietnam Equity Fund, JPMorgan Vietnam Opportunities Fund, SSIAM VNFinLead ETF or Premia MSCI Vietnam ETF…

In addition, the funds UVO (United Vietnam Opportunity Fund) , KFVIET-A (Krungsri Vietnam Equity Fund-A) , SCB Vietnam Equity Fund (SCBRMViet) … are quite small in size, about tens of millions of USD, mainly for indirect investment. continue to enter Vietnam through funds such as JPMorgan Vietnam Opportunities Fund, VNM ETF, FTSE Vietnam ETF, Vietnam Equity Fund…

The core force participating in Vietnam’s ETFs

Along with the development of the stock market with supporting products such as depositary certificates (DR – Depositary Receipt), not only corporations, large funds but even Thai individual investors can also indirectly invest in Vietnamese stocks.

DR based on DCVFM VNDiamond ETF (FUEVFVND) has only been IPO since March 2022 but has caused fever in Thailand when continuously attracting strong capital. Currently, the size of DR FUEVFVND that Bualuang Securities has issued is about 5.35 billion Bath (VND 3,800 billion), equivalent to 20% of the DCVFM VNDiamond ETF portfolio .

Previously, the first DR based on the DCVFM VN30 ETF (E1VFVN30) issued by Bualuang Securities in 2018 was also very popular with Thai investors. The size of DR E1VFVN30 issued by Bualuang Securities is currently about 5.53 billion Bath (VND 3,900 billion), equivalent to 1/2 of the DCVFM VN30 ETF portfolio .

In fact, buying foreign securities was not easy. In addition, the Vietnamese stock market is limited in the percentage of foreign ownership. These are barriers that make it difficult for foreign cash flow to access many quality stocks on the exchange. However, the development of DR products is expected to solve the above problems, thereby paving the way for foreign investors, not only Thailand, to return to the Vietnamese market in the future.

A DR is a transferable security that is traded on the stock exchange of the home country but represents another security issued by a public company listed in another country. The DR is exposed to exchange rate risk when the home currency appreciates against the currency of the country in which the securities represented by the DR are listed.

Ha Linh/Market Lifestyle