REG - VietNam Holding Ltd - Monthly Investor Report

VietNam HoldingAnnouncement

14/08/2020 09:05

RNS Number : 1744W
  
VietNam Holding Limited
  
14 August 2020
  
 

VietNam Holding Limited ("VNH" or the "Company")
Monthly Investor Report
A report detailing the activities of the Company for the month July 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.
Force for Good
Having been a signatory of the United Nation's Principles for Responsible Investment (PRI) for over a decade now, VNH has always considered environmental, social and governance (ESG) as an integral part of its investment process, which is why we are so proud to reveal our latest PRI assessment of A, A* and A.  
Covid-19 has emphasised how important ESG investing is in helping shape positive outcomes, not least within developing countries. In Vietnam's case, it also has highlighted the role social responsibility has played in the country's effective handling of the crisis compared to other nations around the world. We have engaged with our portfolio companies in many ways and will continue to do our part in helping them navigate through the next norm whilst also exploring opportunities with other budding businesses that, in our view, are purpose-driven and well-positioned for sustainable growth.   
The Fund outperformed local stock indices in July but was still down 2.1%. Despite the falls in equity markets, we continue to see signs of bottoming out and recovery in Vietnam's economy. Exports were almost flat year on year (YoY) but jumped by 9.5% month on month (MoM). Imports decreased by 4.1% YoY, but again increased by 7.3% MoM. As such, Vietnam ran a US$1bn trade surplus in July, and US$6.5bn year to date (YTD). We maintain our cautious view on the global demand side, which remains highly correlated with Covid-19 and its ongoing disruption on the global economy. Our outperformance in July stems partly from us taking some profit in FPT, the software and IT services provider, by reducing our stake from around 15% to 12% and selling at a premium of 20% to the market price.
Clearly, the recent emergence of new Covid-19 cases in Da Nang surprised Vietnam, after having contained the outbreak so well with under 500 cases, zero deaths and recording 99 days without any new community-spread cases until 24th July. There are now 20 deaths and a total of 905 cases as of 14th August. Whilst these figures remain minimal compared to the rest of the world, the economic impact has been dramatic. Some of the cases were imported and of course quarantined upon arrival, but most were transmitted throughout the community, largely in Da Nang and Hoi An, two hugely popular tourist destinations. Da Nang was immediately put under strict lockdown, after having enjoyed a comeback from the initial shutdown. Vietnam's usual booming tourism business is now halted. Vietnam Airlines, the national flag carrier, plans to halve salaries for pilots and flight attendants, for example, and is looking to sell several planes amidst projections of US$650m in losses for the year. The next few weeks will be key to see how the spread of the virus is contained.
There are some reasons to remain hopeful. Retail figures for the month of July, particularly for online sales, show that consumer spending is increasingly optimistic. Let us not forget the country's relatively quick recovery following the national shutdown in March. If the government's handling can continue to ensure public confidence as it did before with closed borders, testing, tracking and tracing, hotspot isolating and caring for patients in the specialist National Hospital for Tropical Diseases, then tourism and domestic spending are likely to bounce back again. In the end, Vietnam's battle against Covid-19 boils down to its people pulling together and making it their duty to follow the government's guidelines and rally against the virus as a matter of national security. In the long run, we believe businesses with sustainable strategies will benefit from this type of spirit and consumer behaviour.
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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