VinaCapital Reduces PNJ Stake Below 5%

Investment funds under VinaCapital have reduced their stake in Phu Nhuan Jewelry Joint Stock Company (PNJ) to below 5%. VinaCapital announced that as of July 8, it is no longer a major shareholder in PNJ. The divestment occurred after PNJ's stock price showed signs of recovery, following three consecutive sessions of hitting the floor due to the impact of a scandal involving its subsidiary, P-Lab, which is linked to a diamond smuggling ring involving 28,000 stones. Five institutional investors related to VinaCapital sold 6.35 million shares, equivalent to approximately 1.24% of PNJ's capital. Among these, Generali Vietnam Life Insurance Company and VinaCapital Frontier Opportunities Equity Fund divested their entire holdings, while other investors sold hundreds of thousands to over a million shares. VinaCapital stated that the group of investment funds still holds over 25.8 million shares, equivalent to nearly 5% of the leading jewelry enterprise's capital. This means they will not need to publicly disclose trading information in the future unless their ownership stake exceeds 5%. PNJ's stock has experienced its most volatile week in years. After a three-day consecutive decline, PNJ reversed to a 2.4% increase, reaching VND 52,000 per share, with a record trading volume of over 25 million shares. However, this recovery was short-lived. In the subsequent two sessions, the stock fell by 3.9% and 6.8% respectively, closing the week at VND 46,000. Since the P-Lab incident was announced, PNJ's stock has dropped by more than 26%, reaching its lowest price in over a year. The market capitalization has shrunk by approximately VND 8.5 trillion (about $330 million). This sharp correction has led many securities firms to tighten their margin lending ratios for PNJ shares. FPTS reduced its margin ratio for PNJ from 50% to 30%, and SSI lowered its margin lending for PNJ shares to 40%. Some other securities companies, such as Phu Hung and TCBS, have removed PNJ from their margin lending lists altogether, despite previously offering up to 50% ratios. Mid-week, PNJ announced a plan to repurchase treasury shares, which management described as a measure to protect the company's value and shareholder interests. They affirmed that business operations remain stable and long-term development strategies are proceeding as planned. Some analytical groups, such as SSI and ACBS, have temporarily moved PNJ shares to a 'review' status, rather than recommending a buy, pending further information from regulatory bodies and the company. Meanwhile, others, like MBS, believe the stock has been significantly discounted and is at an attractive valuation for investors with a medium to long-term perspective. Most securities companies believe that PNJ's biggest challenge at this stage is to restore the confidence of both customers and investors in its corporate governance. According to MBS, if the investigation does not uncover further details related to senior personnel or PNJ's legal liabilities, the impact on business results will be short-term. "Customer confidence can be gradually restored through remedial measures, enhanced internal controls, and transparent communication," stated an MBS report. Source: VnExpress