Vietnam based Securities Investment Fund going into liquidation

Indochina Capital will close its securities investment fund Indochina Capital Vietnam Holdings Limited (ICV) as announced, but the company still confirms the continuous operation in Vietnam.

Beat Schurch, head of Indochina Capital's securities investment division told yesterday that ICV is one of five funds managed by Indochina Capital and the portfolio realisation of ICV does not mean that the management company will stop operation.

Four remaining funds of Indochina Capital include three real estate investment funds and another in private equity in Vietnam with a total current value of $500 million. According to Beat Schurch, the investors of these funds committed to invest in long time so they [three funds] will not be forced to withdraw capital like ICV.

ICV fund has total NAV of $242.9 million till late July. In which, the cash accounted for $120-130 million, over $101 million worth of listed securities and the remainder is the shares on informal stock market and shares of private firms. Thus, ICV's listed share realisation will not cause strong impacts on Vietnamese stock market, Schurch said.
He admitted that the event is new.

Given explanation on the portfolio realisation, he said that in 2008 when the global financial crisis broke out, ICV fund certificate price on London Stock Exchange slumped to below NAV on each certificate. At that time, 40-45 percent of ICV (mainly speculation funds) enhanced purchase at $3 per fund unit. Currently, ICV fund is traded at about $4 per unit.

If selling these shares earlier after Vietnamese stock market has surged strongly in some recent months, receivable profits of shareholders (including the available cash volume of ICV) will be much higher. Therefore, these speculation funds called for the extraordinary shareholders meeting of ICV last week and voted to the early portfolio realisation in Vietnam.

Indochina Capital pledged that ICV will not sell listed shares massively to avoid sharp reductions in these share prices and bad affects to Vietnam where Indochina Capital keeps operating.

(Source: Vietnam Stock Market News)

What really happens? Vietnam's stock market is no longer attractive or the fund management company no longer satisfies its investors' requirements?