REG - VietNam Holding Ltd - Monthly Investor Report

VietNam HoldingAnnouncement

17/01/2023 07:16

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RNS Number : 9545M  VietNam Holding Limited  17 January 2023

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

Monthly Investor Report

A report detailing the activities of the Company for the month of December
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/intboqfu/vnh-investor-report-december.pdf)
 and a summary of the report is included below.

Manager Commentary - So long 2022 and hello Year of the Cat

December winded down the extraordinary highs and lows of one of the biggest
rollercoaster years in a generation for equity investors around the globe.
Putting that into context in Vietnam makes it a distinctive month to draw on,
indeed with the pandemic seeming like a lifetime ago. As the world's
poly-crisis environment and domestic nuances, including the government's
corruption crackdown, rattled equities month-to-month all year, from a macro
perspective it is worth noting that December saw an 8% GDP growth boom in
Vietnam, a decade high. Most recent estimates from the Asian Development Bank
expect this to cap out at 7.5% for 2022 as a whole.

FDI flows into Vietnam also ended the year on a record high - US$27bn for 2022
overall - with 224 new projects kicking off in December alone bringing the
total for the year to 2,036, according to Vietnam's Ministry of Planning and
Investment. Vietnam's manufacturing and processing sector maintained the lead
in attracting the most FDI in December, further verifying the country's role
as a key alternative to China. Korea, Singapore and Hong Kong topped FDI
sources for the month of December, while China and the US remained Vietnam's
top trading partners in terms of two-way turnover - US$175.6bn and US$123.9bn
respectively for the year.

In fact, Vietnam's trade surplus for 2022 - US$11.2bn - was the second highest
ever, and just when you thought that was huge enough for this curveball of a
year there was also the massive announcement in early December of a US$15.5bn
Just Energy Transition Partnership (JETP) deal between Vietnam and members of
the G7, Denmark and Norway. It's the world's third JETP after South Africa's
and Indonesia's, and emphasises the additional 15 trade agreements that
Vietnam currently has in place and how they also have been helping to shape
the country into the global manufacturing hub it is today.

December was a story worth telling for equities too. Despite ongoing concerns
about how the rising US dollar and fast-changing global economy might affect
Vietnam going forward, the domestic stock market managed to recover as selling
pressure waned and liquidity gradually increased. Full year net buying ended
up making the US$1bn mark, a first since 2019. While we expect local indices
to consolidate in this current environment of monetary tightening and
wait-and-see sentiment, it is times like these when rare opportunities for the
long-term arise, particularly given the attractive valuation levels of
Vietnamese stocks and consensus view that corporate earnings growth is more
than 10%. VNH was up +4.7 in December and outperformed VNAS for the calendar
year with its NAV falling 30.1% versus the VNAS' decline of 39.8%. Strong
double-digit growth in the retail sector in 2022 stood out, and we expect that
to continue in the lead up to Tet.

Although inflation was a risk for all countries in 2022, it remained low
compared to the rest of the world ending the year at 3.15%. This is widely
expected to rise to somewhere between 4.5 and 5.0% in 2023, again considering
the lingering implications of the global risk landscape. PMIs for December
also implied a slowdown, with the current consensus growth target for Vietnam
in 2023 standing at around 6.5%.

As China's zero-Covid policy helped pave the way for more foreign
manufacturers moving into the country in 2022, we believe the overall impact
of its recent U-turn re-opening is only likely to benefit Vietnam, indeed all
of Southeast Asia, particularly when it comes to tourism, which has suffered
since the start of the pandemic. With Chinese consumers' revenge-spending
being amplified on a 1.2bn scale this could be just the boost this sector
needs.

Rising infections in the China region might dampen their travel plans during
the upcoming Lunar New Year, but Vietnam's Year of the Cat is considered a
'good' year associated with longevity and fortune and domestic travel is
expected to be busy. The Cat is the fourth animal in the Vietnamese zodiac and
the only one of the 12 signs that is different to the Chinese, which is
instead the Rabbit. The Cat in Vietnamese culture is a symbol of tactful
consideration and thinking ahead, which is why we see many across the country
feeling hopeful during this festive time.

 

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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