SINGAPORE (Reuters) - Vietnam Asset Management VAM, part owned by Dubai Investment Group, plans to list its flagship fund in Singapore or London next year to raise up to $200 million (100 million pounds), its chairman told Reuters on Friday.
The choice between the Singapore Exchange and the London Stock Exchange’s Alternative Investment Market will depend on the listing guidelines for SGX’s second board, Executive Chairman John Lyn said in an interview.
“We thought SGX would come out with the criteria in September so we’re still waiting,” he said, adding the firm favoured a Singapore listing because the city-state was closer to Vietnam.
VAM hoped to list its Vietnam Emerging Market Fund, which has assets of $45 million, in the first half of next year, he said.
SGX said in May it planned to replace its SESDAQ board for smaller companies with a new board modeled along the lines of London’s AIM market. A key element of the new SGX board will be the introduction of sponsors to ensure quality and compliance at the listed entities.
SGX will unveil details of the new board later this month, an SGX spokeswoman said. Lyn said VAM’s Vietnam Emerging Market Fund invested primarily in recently privatised firms and those trading on Vietnam’s over-the-counter market, where valuations are lower at about 13 to 14 times price-earnings compared with about 40 for stocks listed on the main board.
Lyn said the fund’s larger holdings include Vietnam’s largest fertiliser firm PetroVietnam Fertiliser DPM.HM and the country’s second-largest fish exporter Hung Vuong Seafood, which will likely be listed on the main board of the Ho Chi Minh Stock Exchange .VNI in the first quarter of 2008.
In Vietnam, companies usually list their shares on the OTC market before moving to the main board. According to Lyn, about $1 to $1.5 million worth of shares are traded on the OTC market daily so liquidity is not a concern.
On AIM there are at least two listed Vietnamese funds — the Vietnam Infrastructure Investment Fund and Vietnam Opportunity Fund, according to Lyn.
VAM is separately raising another $150-$200 million for a private closed-end fund with help from shareholders Dubai Investment and Singapore stockbroker UOB Kay Hian (UOKH.SI), Lyn said.
Dubai Investment and UOB Kay Hian each bought a 6 percent stake in the company for an undisclosed amount in September.
VAM is also looking at private equity, but would not venture into neighbouring Laos or Cambodia, he added.
“Like all emerging markets, timing is quite important. People who went into China 10 years ago lost money, but those who got in five years ago made serious money,” he said.
“The Vietnamese government has seen the success of China and is replicating that success twice as fast,” he added.
UOB Kay Hian’s executive director Esmond Choo said in September that the Singapore firm chose to invest in VAM because it was run by local Vietnamese who have worked abroad for international firms such as Franklin Templeton and JPMorgan.
Vietnam’s benchmark stock index has gained about one-third since the start of the year, following a 144 percent rise last year, as the country’s move to open up its economy plus a growth rate of over 8 percent attracted investors.