REG - VietNam Holding Ltd - Monthly Investor Report

VietNam HoldingAnnouncement

12/11/2020 07:10

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RNS Number : 1029F  VietNam Holding Limited  12 November 2020

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

Monthly Investor Report

A report detailing the activities of the Company for the month October 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/vlsegbj0/vnh-investor-report-october-2020.pdf)
 and a summary of the report is included below.

The emergence of a new frontier

Vietnam is poised to become the biggest constituent in the MSCI Frontier
Markets 100 Index following Kuwait's recent reclassification as an Emerging
Market. This means that Vietnam could make up as much as 30% of this benchmark
index by the end of 2021 and potentially attract several hundred million
dollars more from foreign equity investors.   Vietnam's emerging economy is
unique not only given its remarkable growth over the past three decades and
since launching its stock market only 20 years ago but also because it is one
of the few countries in the world that will end 2020 with GDP growth.
Containing the pandemic well has certainly helped Vietnam's economy bounce
back in the second half of this year with ever-increasing improvement in
domestic demand and manufacturing activities. The government's aim for
increased public investment in infrastructure has also played an important
role in building a sustainable recovery since lockdown.

Foreign direct investment remained strong in October and the country saw
further export growth, up 10.2% for the month, as well as a record
year-to-date trade surplus of USD18.7 bn. Corporate Q3 results released
throughout the month proved promising across most sectors apart from harder
hit areas, such as aviation and tourism; though both are in better shape than
some other tourist destinations around the world thanks to buoyant demand in
domestic travel. Retail sales also made notable 2.4% month-on-month and 6.1%
year-on-year increases in October. The Fund outperformed the VNAS index with a
3% NAV increase largely due to our overweight holdings in selective companies
across the Industrial, Retail, Banking and Telecommunications sectors. The
most significant contributor was steel producer Hoa Phat Group (HPG) up 15.8%
on its exceptional Q3 earnings and NPAT year-on-year increase of 111% stemming
from stellar sales growth. In Retail, we benefited from our overweight
holdings in Mobile World Group (MWG) and Phu Nhuan Jewellery (PNJ), up 1.8%
and 14.2% respectively for the month. Our increased holdings in Vietin Bank
(CTG) also paid off. The bank recorded a robust year-on-year rise in earnings
of 22.6% for the first nine months of 2020, placing it amongst a few banks
with two-digit NPAT growth. Not only is its stock price relatively cheap
compared with its peers but the bank is also well-positioned for further
growth given the government's amended law on the investment and management of
State capital for joint-stock enterprises. This amendment allows the three
largest banks in Vietnam to increase their charter capital and improve Capital
Adequacy Ratios, which gives room to further expand business activities. We
have been increasing our holdings in the Banking sector throughout the
pandemic given their attractive valuations and strong growth potential in an
under-banked country. Vietnam's resiliency throughout the pandemic has helped
raised its profile as a major trading partner in the world and an attractive
manufacturing alternative to China. It is the Chair of ASEAN this year and has
recently attracted stately visits from the new Prime Minister of Japan, the
Foreign Secretary from the UK Dominic Raab, as well as US Secretary of State
Mike Pompeo, two weeks before the American Presidential Election. Trade
relations are expected to gain further momentum and we anticipate Vietnam's
economy will return to an expansion rate above 6% next year given the
country's multiple engines of growth.

In October the Fund held its AGM where all resolutions were passed, including
authority for a tender offer for 15% of the Company's shares. The Tender price
announced on 9(th) November was $2.5857 per share - see
www.vietnamholding.com/investors/announcements for more details.

 

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

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

William Marle / Giles Rolls

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