REG - VietNam Holding Ltd - Monthly Investor Report

VietNam HoldingAnnouncement

13/10/2022 07:16

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RNS Number : 7704C  VietNam Holding Limited  13 October 2022

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

Monthly Investor Report

A report detailing the activities of the Company for the month of September
2022 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/dkinexmq/vnh-investor-report-september-2022.pdf)
 and a summary of the report is included below.

Manager Commentary - September's Slippery Slope

Most global equity investors are familiar with the September Effect, an
anomaly widely considered as a 'change of season' downturn in the month of
September. Of course, that is not always the case, but as 2022 carries on with
yet more twists and turns, this year's September ended as one of the most
down-falling months on record. As the market reacts, turbulence in the world's
financial markets has been of a magnitude not seen for a generation. Global
inflation is in double digits for the first time in 40 years and tectonic
transformations regarding climate change and other intensifying crises
continue to stir up volatility worldwide.  Despite Vietnam's ongoing growth
and economic resilience this year, its equity market suffered from this
worsening global sentiment in September, and domestic concerns on some bad
actors in the real-estate and corporate bond markets.  As more than half of
Vietnamese stocks are in banks and real estate, also inherently vulnerable to
rising interest rates, it goes without saying that market selling hit both the
broader market and VNH.

Telecommunications (FPT) and Retail (MWG, PNJ, DGW) holdings remained more
robust as they were less impacted by the intertwining global macroeconomic
risks arising from a strengthening US dollar, central bank tightening, ongoing
implications from the war in Ukraine and other geopolitical disruptions around
the world. Although Vietnamese banks likely face a less favourable business
environment in 2023, those in the portfolio have healthy balance sheets and
attractive valuations for the long-term. The real estate sector, which VNH
remains underweighted in, was the worst performing sector in Vietnam's stock
market in September due in part to increased scrutiny of bond issuances,
credit quota from some banks, and pending reviews of real estate laws.

Vietnam's continued GDP growth against all these global headwinds cannot be
overlooked - its Q3 GDP was high at 13.7%. This shows further strengthening
domestically post-pandemic and underlines the fact that Vietnam's GDP has
grown faster than that of any Asian country bar China, averaging 6.2% per year
since 2000.

Through our engagement with our investee companies, we have seen how many
Vietnamese businesses have navigated the trying times of Covid-19. We also see
how this year's growth momentum is increasingly fuelled by the underlying
efforts of Vietnamese business and government bodies to adopt internationally
accepted best practices that help attract investment and drive sustainable
performance. Indeed, as environmental, social and governance (ESG)
considerations evolve with these shifting times and accelerated global
megatrends, we also cannot underestimate the role of responsible investing in
today's world. This is becoming especially evident in emerging and frontier
markets, as last month's extreme weather disasters drew attention to the
upcoming COP27, which takes place in Egypt.

Our stewardship commitments, not least where ESG matters are concerned, have
always been a major pillar of our investment management style. This year one
of our top-five holdings published their very first ESG report (for 2021)
while another investee company made improvements in ESG reporting with more
data, including that of trackable year-by-year progress. As Covid restrictions
were lifted in 2022, we met with various other management teams to advise how
they can improve their ESG practices and disclosures. One of the Fund's
top-five holdings recently asked for our help in reviewing how they assess and
communicate their sustainability achievements better to international
investors. We also helped guide one top-ten holding on how to structure their
ESG Board Committee.

VNH applauds alignment with the United Nation's 17 Sustainable Development
Goals, and one area that continues to grab our attention is companies that
provide active employee training programmes. These programmes benefit many
stakeholders, not only staff but also their communities, and we have seen how
they also have allowed a couple of the Fund's top-ten holdings to attract the
talent they need to grow their business, sometimes beyond market expectations.
In these volatile times, finding companies with sustainable business models
matters even more.

 

 

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 Advisor
                                 Tel: +44 20
7220 0500

William Marle

 

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