REG - VietNam Holding Ltd - Monthly Investor Report

VietNam HoldingAnnouncement

14/10/2020 07:10

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RNS Number : 0367C  VietNam Holding Limited  14 October 2020

VietNam Holding Limited ("VNH" or the "Company")

Monthly Investor Report

A report detailing the activities of the Company for the month September 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
(https://www.vietnamholding.com/media/2lgmvono/vnh-investor-report-september-2020.pdf)
 and a summary of the report is included below.

Banking on a sustainable recovery

Vietnam saw a strong boost in sentiment and economic activity in September
with an improved PMI of 52.2 and a GDP growth of 2.6% for Q3. Although the
full year expected growth of 2.5% is below its multi-decade average of 7%, its
macro-economic picture looks uniquely positive despite the global pandemic. It
is now likely that 2020 will end with a record level of foreign reserves in
Vietnam, possibly over US$100bn. This is the culmination of a record trade
surplus - US$17bn for the year to September - as well as a nine-month high in
foreign direct investment as Vietnam continues to emerge strongly as an
attractive location for manufacturing and natural diversification to China.
The UK's Foreign Minister, Dominic Raab, recently visited Hanoi to discuss
trade matters. As the current Chair of ASEAN, Vietnam is likely to support the
UK's ambition to become part of the successor to the Trans-Pacific Partnership
(even though the UK faces the Atlantic) and to replicate the EU's free trade
agreement with Vietnam sealed earlier this year.

The VNAS Index performed well in September, rising 4.4% for the month, and
driven mainly by banks, food & beverage (F&B) and industrial goods.
Most of the listed banks achieved above market-expectation earnings for Q3,
and F&B companies (VNM, SAB) are also likely to release surprise earnings
growth for Q3 considering the notable domestic retail sales increases. The
Fund's NAV rose by 4.0% led partly by our increased allocation to the banking
sector: we have more than doubled our allocation this year to 20% (the index
weighting is more than 25%). As listed banks tend to be large, a consequence
of this higher allocation is that our median portfolio market capitalization
has risen to cUS$833m. This has also resulted in a higher liquidity profile
for the underlying portfolio.

In our view, the banking sector stands out in Vietnam unlike in many developed
countries right now. Banks are regulated more than other industries and as a
result must adopt best practice standards, which pushes them to maintain
healthier balance sheets and operational resilience. Moreover, we believe 2021
could see strong returns from banks on the back of economic recovery, with GDP
growth of 7-8% forecast. In the longer-term, as Vietnam's e-commerce market
continues to grow and middle-income consumers continue to multiply,
technological advancements will ultimately lead to greater financial inclusion
and wider use of investment and credit products. The growth potential in
Vietnam is huge since despite rapid growth over the past 20 years, less than
40% of the population today has a bank account. As the country further
industrializes and urbanizes, there will be escalating demand for modern yet
affordable housing, mortgage and savings products, and e-payments. The
momentum was marked at the end of the month with Timo Plus, Vietnam's first
digital bank, re-launching its services at the end of September, and the
government's ongoing focus on policies to expand its online payments and
fintech sector, namely by offering start-ups preferential loans from the
Vietnam Development Bank.

The Fund has issued its 2020 annual report and announced the date for the AGM
(30 October). The Fund has recently made two important announcements, firstly
a proposed tender to purchase 15 per cent of its shares at a 2% discount to
NAV, and secondly, adjustments to its fee structure, including a removal of
the incentive fee and modifications to the management fee. Details are
available on www.vietnamholding.com (http://www.vietnamholding.com)

Dynam is hosting a webinar on Friday 30th October at 10:00 AM (UK) and all are
welcome to register to attend.

 

For more information please contact:

Dynam Capital Limited

Craig
Martin
Tel: +84 28 3827 7590

 

info@dynamcapital.com (mailto:info@dynamcapital.com) |www.dynamcapital.com
(http://www.dynamcapital.com)

 

www.vietnamholding.com (http://www.vietnamholding.com/)

finnCap

Nominated Adviser and Corporate Broker
                              Tel: +44 20 7220
0500

William Marle / Giles Rolls

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