REG - VietNam Holding Ltd - Monthly Investor Report

VietNam HoldingAnnouncement

14/04/2020 11:00

RNS Number : 5621J
  
VietNam Holding Limited
  
14 April 2020
  
 

VietNam Holding Limited ("VNH" or the "Company")
Monthly Investor Report
A report detailing the activities of the Company for the month March 2020 has been issued by Dynam Capital Limited, the investment manager of the Company. Electronic copies of the report have been made available to shareholders on the Company's website and a summary of the report is included below.
Covid-19 Re-writes the scripts
It was a historic month for global financial markets as unprecedented shutdowns to help prevent the spread of COVID-19 triggered the steepest falls ever recorded across all asset classes and regions. 
The Vietnam All Share Index fell by 26.5 percent in March, as the deepening effects of the pandemic pulled Vietnam's GDP growth to its lowest level since the global financial crisis in 2009; the Fund's NAV per share declined by 28.2 percent, reflecting a month that saw the highest recorded volatility in the history of financial markets, according to Calastone, the largest global funds network. The International Monetary Fund also cited the speed in which the markets fell and decreased its global GDP predictions for 2020 by levels it said had never been seen before. 
While the lockdowns are bound to dent Vietnam's economic momentum, we believe this crisis is not typical of a normal recession and that Vietnam stands out for how it has proactively contained the spread of COVID-19 and for what it continues to offer in terms of growth relative to the rest of the world. It is well-positioned to handle inevitable structural changes, given its diversified pool of trade partners and surge in exports to the US throughout the US-Sino trade war. For example, we expect exports to China to recover in the second half of 2020 as cities there re-open. We also believe foreign firms will shift some proportion of their production from China to Vietnam to trim costs, diversify supply chains, and benefit from the Government's recently announced fiscal and monetary stimulus measures. 
We are, therefore, cautiously optimistic about the opportunities that the pandemic presents for the long term in relation to our investment themes and exceptionally attractive valuations of companies we feel have great potential. We are conscious, however, of how this crisis could accelerate the deterioration of certain sectors and businesses that were already suffering before the virus set in. For instance, we recently exited our position in a garment company not only because of the COVID-19 impact on demand or the fact that clothing retailers globally were ailing before the virus emerged, but also because over time its executives became less accessible to us. Communication and transparency are critical to our investment process and from our perspective this was a red flag in terms of their ability to thrive in a post-COVID-19 world. 
Rigorous Environmental, Social and Governance (ESG) analysis has been at the heart of our approach from the start, and we believe these factors will become even more important while we navigate the coronavirus crisis and its aftermath. As COVID-19 has shown, economic health will become more correlated to public and planetary health.
Remote working and social distancing have also become a new norm and the world is ever more dependent on technology to operate and connect. An example holding to illustrate this is FPT, the largest information technology outsourcing company in Vietnam, which presented a 17.1 percent revenue and 18.1 percent profit growth forecast at its recent 'on-line' AGM. It is our largest holding and we think that the information technology sector will continue to flourish both domestically and globally. As uncertainty blankets the world, we must always brace ourselves for different scenarios, whether it is a 'V' recovery or a second wave spread of infection, but in our view one thing is clear: investing in a portfolio with sustainability at its core will be as imperative as ever.
 
For more information please contact:
Dynam Capital Limited                  
Craig Martin                                                                                       Tel: +84 28 3827 7590
 
info@dynamcapital.com |www.dynamcapital.com
 
www.vietnamholding.com
finnCap
Nominated Adviser and Corporate Broker                                         Tel: +44 20 7220 0500      
William Marle / Giles Rolls


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