REG - VietNam Holding Ltd - Monthly Investor Report

VietNam HoldingAnnouncement

15/02/2023 07:16

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RNS Number : 9861P  VietNam Holding Limited  15 February 2023

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

Monthly Investor Report

A report detailing the activities of the Company for the month of January 2023
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/seabwxou/vnh-investor-report-january.pdf)
 and a summary of the report is included below.

Manager Commentary - Just the Beginning

January provided some interesting insights into what is to come in Vietnam in
2023. As liquidity continued to improve and FX risks stabilised, political
events hogged headlines with the extraordinary resignations of two (out of the
four) deputy prime ministers - one in charge of diplomacy and the other of
public health - in the first week of the month alone. News of both being
linked to mishandlings of Covid-19 supplies and repatriation flights had been
brewing over recent months, and in an unprecedented twist, the Party Central
Committee went on to also announce that the President, Nguyen Xuan Phuc, would
be resigning from all his positions, including the Politburo - the highest
policy-making body - for "violations and wrongdoing" by officials under his
control.

 

Despite the noise, retail sales remained upbeat thanks to the Tet holiday and
while Vietnam's manufacturing sector lost some momentum, more to do with
global economic uncertainties, it was the country's biggest FDI industry
recipient in January with 153 new projects and additional registered capital
of US$ 1,200m, according to the Ministry of Planning and Investment. FDI
disbursement is at an all-time high with public investment also accelerating
and clearly becoming a key growth driver for Vietnam moving forward.

 

VNH's NAV was +11.1% for the month, slightly lower than the index. This
followed the Fund's outperformance of the Vietnam All Shares Index (VNAS) for
the 2022 calendar year, with its NAV declining 30.1% versus the VNAS' decline
of 39.8%. Strong double-digit growth in Retail stood out in 2022, and we
expected that to continue in the lead up to Tet. In January, VNH benefitted
from its overweight in outperforming banks, STB, ACB and MBB, as well as its
underweight in Real Estate, keeping to our conviction that banks were oversold
in 2022 and that real estate companies would face increasing headwinds due to
the lagging impacts of rising interest rates. The Fund's overweight in
Industrials - IDC (up +28.4%) and GMD (up +17.7%) - along with its continued
convicted positions in Telecoms and Retails, also all paid off.

 

We feel optimistic about a more stable VND in 2023 as external and internal
risks have reduced, but also expect divergence of EPS growth among sectors and
stocks to increase. Additionally, on top of very attractive valuations, market
liquidity also continues to move in the right direction following the
indiscriminate selloffs and short-term shocks of 2022. Foreign investors net
bought US$ 179m in January and we saw a comeback of both foreign and local
participants in the equity market. As with several ASEAN countries, Vietnam is
kicking off 2023 in a strong position to outstand the rest of the world in
terms of GDP growth - forecasted at 6.5% for the year.

 

However, companies will need to strengthen their corporate governance - their
internal controls, due diligence, organisational structure, culture, and
transparency - if they are to maintain resilience given the global
uncertainties and black swans that persist in today's poly-crisis norm. This
is something we continue to work on with investee companies and Vietnam's
business community at large. As many companies look to expand, take advantage
of new technologies and access necessary capital to help them grow and
innovate, long-term performance has become much more contingent to how they
address environmental, social and governance (ESG) matters. Although
challenges remain, Vietnam is unarguably on a positive path with considerable
potential for building a more sustainable economy and society.

 

As most of its backbone industries are ESG intensive - this includes the steel
and rapidly expanding manufacturing sectors - Vietnam has a lot at stake
compared to neighbouring countries. Through our engagement with companies, we
see a growing recognition that the integration of ESG principles not only
enhances a company's reputation, but if properly put into practice also
creates more positive outcomes for stakeholders. The government's launch of
the Sustainable Development Strategy of Vietnam, the One Strategic Framework
for Sustainable Development Cooperation, and the Vietnam Corporate
Sustainability Index are already raising awareness, in this respect. In
addition, over recent months, and weeks, we see government authorities also
passing more laws related to environmental protection, sustainable
development, and corporate social responsibility. If the last year tells us
anything, it is that enforcement of these will be real.

 

We thank you for your continued support.

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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