REG - VietNam Holding Ltd - Monthly Investor Report

VietNam HoldingAnnouncement

13/12/2022 07:16

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RNS Number : 5059J  VietNam Holding Limited  13 December 2022

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

Monthly Investor Report

A report detailing the activities of the Company for the month of November
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/c5mncvvj/vnh-investor-report-november.pdf)
 and a summary of the report is included below.

Manager Commentary - Back to the future

November can only be described as a bumpy ride for equities markets globally,
yet as we wind down what has been a stormy year in Vietnam's capital markets,
its economic growth story still stands out. Vietnamese stocks fell sharply in
the beginning of November due to credit tightening in the country's nascent
bond market, as the government continued its crackdown on corruption with
further arrests and regulatory changes. Certain real estate stocks were
hardest hit in this steep correction, and it is worth noting that none of
those worst affected names are in our portfolio. In fact, we had significantly
reduced our holdings in real estate and related sectors the month before given
their potential difficulties with the rising interest rate environment, and
our overweight in KDH, up +21.4% for November, was a contributor. Forced
selling from margin calls waned by mid-month, but market volatility remained
high with investors 'bottom fishing' for short-term profit given the
attractive valuations. The rally led to a strong end-of-month rebound and we
are now seeing steady flows into Vietnam's equity markets pushing up prices of
large-caps and luring more local investors back.

VNH outperformed the benchmark index by 4% for November and circa 8% YTD. We
believe, that after this recent 'technical' rally, the performance of
different sectors and stocks in Vietnam will become even more diverse, and VNH
has slightly increased its exposure to larger-caps, higher liquidity and
acceptable valuation stocks. Retail continued to be the most resilient sector,
as retailer sales were once again the main growth driver - 17.5% year-on-year
- showing during November's 'Black Friday' period just how powerful demand was
despite rising inflation and the end of 2% VAT support. Although we envision
domestic consumption growth to normalise to around 10% as we move into 2023
(given the implications of lower global demand), renewed inbound tourism
should serve as a boost for the sector especially with the upcoming Christmas
holidays and run-up to Tet.

PNJ, the country's leading jewellery company and top holding in our portfolio,
continued to perform exceptionally well in November. Through our engagements
with the company - one of the first in the country to report on the progress
of its sustainability strategy - we are pleased to see what they have
accomplished this year on building an ESG framework, and this includes taking
on some recommendations we gave them earlier in the year. The company has gone
from strength to strength with a market cap of $100m 12 years ago to $1bn
today. Other listed companies in Vietnam have been doing more this year to
enhance the quality of their corporate governance and reporting, and from our
perspective the government's efforts to get companies to understand their ESG
matters better are beginning to show. Its actions to fight corruption might
have created a lot of short-term pain in the capital markets, but it also
instilled more trust for the long-term. The reality is that the government has
managed to keep its growth story on track despite the increased market risks
and intensifying recessionary threats characterising 2022 globally.

Vietnam remains one of the fastest growing economies in the world and we
expect 8% GDP growth for 2022 and 6.5% for 2023. The Vietnamese government is
determined to keep its debt in relation to GDP at a very low level and it has
managed to control inflation relatively well too - currently at around 3%
compared to the double digits in Europe, for example. One of the biggest
take-aways from this rollercoaster year is how important our stewardship role
is during such turbulent times. We not only needed to stay nimble and active
in terms of our selection and risk management but also as a responsible
investor and signatory to the PRI act on our own commitments to helping the
transition to net-zero and building sustainable futures. We recently
participated in a survey of institutional investors as a member of the Asia
Investor Group on Climate Change (AIGCC), and they featured VNH's first
climate risk assessment report in their 4th edition of 'Translating to Action
- Net Zero Investment in Asia'. This initiative is key to raising awareness
and encouraging action on the risks and opportunities associated with climate
change and low-carbon investing across Asia. Such collaborations are an
essential ingredient to long-term growth, and that is how we would sum up what
is yet to come in Vietnam in 2023 and beyond.

 

 

 

 

 

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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