REG - VietNam Holding Ltd - Monthly Investor Report

VietNam HoldingAnnouncement

17/08/2023 07:15

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RNS Number : 6225J  VietNam Holding Limited  17 August 2023

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

Monthly Investor Report

A report detailing the activities of the Company for the month of July 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/wsanipv5/vnh-investor-report-july.pdf)
 and a summary of the report is included below.

Manager Commentary - The heat is on

Vietnam's stock market made an impressive comeback in July, with the VN Index
reaching its highest level in more than eight months and surpassing major
stock markets in the world, such as the US, Korea, India, and China. The
momentum stems from a much-improved domestic macroeconomic environment that
has been spurred by fiscal and monetary policies, including the State Bank of
Vietnam's monetary easing since the beginning of 2023. This included a fourth
consecutive round of interest rate cuts in July, which, amidst a stable FX
rate, saw month-on-month (MoM) exports increase for the first time this year
and a record trade surplus reach US$15bn.

 

Vietnam's commitment to sustainable economic development has also helped
foreign direct investment (FDI) expand to an all-time high with US$12bn
dispersed in the first seven months of 2023 (7M2023). 70% of this was in the
manufacturing sector, which despite still contracting, is back on an upward
trend, up 4.2% MoM and 3.6% year-on-year (YoY). To put that into greater
context, the Manufacturing Purchasing Manager Index (PMI) was 48.7 in July,
the highest level in five months, and we expect the recent rise in production
and exports to continue in 2H2023, for example, with Samsung's new series of
mobile phones scheduled to be released in August.

 

Additionally, Vietnam's tourism industry has continued to rebound.
International tourist arrivals in the country rocketed to 6.6m for 7M 2023
YoY, growing to nearly 70% of pre-Covid levels, with tourism-related sales
increasing by 53.6% YoY. Vietnam's new e-visa extension from 30 to 90 days is
projected to enhance the country's resurgent tourist sector in 2H2023. The
recent 2% VAT drop and increase in the statutory base rate for officials' and
public employees' wages, both of which went into effect in July, should also
support purchasing power.

 

As July was the hottest month on record, the rising average world temperature
is only adding on more pressure to the already tense global economy, for
example, through reduced labour productivity, damaged crops, higher mortality
rates, and massive trade disruption. Nonetheless, Vietnam's efforts in driving
its strategies and relevant policies have demonstrated the country's fervent
willingness to address climate change issues on its own, including its
recently approved National Energy Master Plan.

 

Public investment will continue to be a key driver of growth in Vietnam's
economy in all these areas, with public disbursements increasing 18% YoY to
US$5.7bn in July, according to the Ministry of Finance. Although the fiscal
year target of US$28bn remains unmet, we expect the government to increase
public investment expenditures through the end of the year to keep all its
economic development plans on track and to mitigate the negative impact of
slowing global demand for exports and production. We expect industrial
real-estate stocks, such as IDICO (+6%) to benefit from accelerated
infrastructure development and FDI.

 

Because of the growing optimism among both domestic and foreign investors in
Vietnam, market liquidity increased dramatically - by 30% from Q1 - to US$1bn
at the end of July. The market is still trading at more attractive levels than
its Asian counterparts. The increase in stock market activity helped boost the
Fund's position in SSI Securities, a broker, by +14.3%. The Fund's overall
+8.4% gain in July was also helped by its overweight positions in FPT (+15.2%)
and Gemadept (+12.5%). We underperformed the VNAS index in July, which was up
9.6%, in part on excitement in stocks related to Vincom, whose founder's stake
in VinFast was being readied for its debut on Wall Street (via a SPAC on 15th
August, temporarily reaching a market value of $85 billion - almost twice that
of General Motors or Ford).

 

 

 

 

 

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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