Although a state visit by Japan’s Emperor Naruhito and his wife Empress Masako brought central London to a near standstill on Tuesday, it did not delay the annual general meeting of investment trust Vietnam Enterprise Investments.
As crowds lined Claridge’s in Mayfair to catch a glimpse of the Emperor and Empress before they were greeted by King Charles and Queen Camilla at Horse Guards Parade, more than 100 shareholders gathered at Stationers’ Hall, in the shadow of St Paul’s Cathedral, to learn more about their investments.
They were not disappointed when lead portfolio manager Tuan Le and Dominic Scriven (founder of Dragon Capital, the investment firm that manages the trust) made their case for investing in Vietnam. Those who stayed for lunch, including myself, were treated to a refreshing Vietnamese beer (I resisted the urge) and a delicious spread of Vietnamese food.
The choice of venue – home of The Stationers’ Company, the City of London car hire services company for the communications and content industries – was apt as the trust is on a mission to bring its investment story to a wider audience, hence its first Annual General Meeting in London since the trust listed in the UK eight years ago.
In theory, the £1.2bn trust should have a huge appeal for investors. Vietnam is currently one of the few engines of economic growth in the world and is benefiting from massive foreign investment as major international companies move their manufacturing bases from China southwards to North Vietnam.
Idyllic: But picture-postcard Vietnam is actually one of the world’s few engines of economic growth
Without breaking the bank, the Government is also investing heavily in the country’s infrastructure, while increased urbanisation is creating a thriving middle class with money to spend. The population (100 million) is also young, with an average age of 33, so it doesn’t have any burdens like the NHS hanging over its neck. Put all this in a pot and you have an ideal economic environment for businesses to thrive and make money for shareholders.
Moreover, as the country moves towards emerging market status (it is classified as a frontier trust), interest in the stock market, especially from foreign investors, should increase.
But this is not happening in the case of Vietnam Enterprise Investments. The fund’s efforts to grow and make money for investors are being hurt by the fact that its shares are languishing somewhat in the doldrums. They trade at a significant discount (20 percent) to the value of the trust’s underlying assets.
This undervaluation is not the result of anything the trust has done wrong, although it has had a difficult 2022. Shares in rival trust VinaCapital are also trading at a discount of around ten thousand.
It is rather a reflection of the general malaise in the UK stock market, which has resulted in a swathe of listed companies (not just investment trusts) trading at rock-bottom prices, which in turn makes them attractive to predators such as private equity. Perhaps this market cheapness will disappear as the UK economy improves. Maybe, maybe not. We just don’t know.
Scriven, who has lived in Vietnam since the 1990s, is determined to get Dragon Capital’s flagship investment fund flying again, although the board will ask shareholders next year whether they want it to continue. Scriven, who speaks fluent Vietnamese, is nothing if not witty.
The board has just cut the fund’s annual management fee from around 1.75 per cent to 1.5 per cent, a move that is in the shareholders’ favour. Further reductions are due if the trust’s assets grow. Dragon is also setting up an office in London to help promote the fund. Scriven’s view is that Vietnam’s bamboo diplomacy – flexible but with strong roots – makes it a simultaneous friend of China, India, Russia and the US. This, he adds, favours the country economically, boosting imports and exports.
In a nutshell, Vietnam Enterprise Investments is a super investment trust that offers investors exposure to one of the world’s economic growth hotspots. Over the past year, despite the issue of discount in the share price, it generated returns for shareholders of 8.3 percent (44.1 percent over the past five years).
Yes, it should just be a peripheral investment in a private investor’s portfolio, but it is a trust with an interesting mandate. For many reasons (some of them moral), I would choose it (or its rival VinaCapital) over a Chinese trust any day.
Six banks on a main street? It will never go out of style…
Thank you for your comments on the removal (or not) of bank branches from our high streets, as Lloyds announced 60 more closures two days ago.
Alan Hartley, a 78-year-old retired NHS finance officer, called to say he had just had a wonderful time travelling on the steam train from Settle to Carlisle. As he strolled through Carlisle city centre, he was surprised to see branches of six banks and building societies within 500 metres of each other on the city’s English Street: Barclays, HSBC, NatWest, Newcastle, Santander and Virgin Money. There is also a post office.
Steam bank: Ribblehead Viaduct on the Settle to Carlisle Railway
“It’s a change to see a high street with so much bank support,” says Alan, who lives in Ewloe, just outside Chester. “Hopefully it will continue like this for a long time.” Certainly.
By contrast, Karen Robinson, a 68-year-old retired accountant, laments the lack of banks in her hometown of Immingham, Lincolnshire. To make matters worse, she says the town does not have a post office as a result of a collapsed roof. A new temporary branch was opened in the civic center but was removed last month. Karen works at Lloyds, which was the last bank to withdraw from the city in 2022. She has to travel to Grimsby (a 40 minute round trip) if she wants to do any banking.
‘It’s very frustrating,’ says Karen. ‘Immingham is a bustling town with a very active dock, two oil refineries and lots of new homes. It deserves a bank.’ She would like to set up a banking centre (a shared bank branch) and has contacted ATM network operator Link about it. The chances of success are limited. Link assessed the town when Lloyds pulled out and felt it was not big enough to accommodate a centre. More imperative is for the Post Office to re-establish a presence in the town.
Finally, it is disappointing to hear that Lloyds is continuing to remove from its branches staff who help customers with queries that tellers cannot resolve. They will now work from home. Peter Wall, a retired solicitor from Birmingham, says this is happening at his Lloyds branch in Harborne. “It’s another blow to elderly customers,” he says. Right.
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