REG - VietNam Holding Ltd - Monthly Investor Report

VietNam HoldingAnnouncement

14/11/2023 07:15

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RNS Number : 3641T  VietNam Holding Limited  14 November 2023

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

Monthly Investor Report

A report detailing the activities of the Company for the month of October 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/4ihbzmcw/vnh-investor-report-october-2023.pdf)
 and a summary of the report is included below.

Manager Commentary: VNH wins 'Best Emerging Markets Single Country trust'

While Vietnam's stock market continued its correction in October, with a steep
monthly decline, VNH kicked off November on a higher note by winning the 'Best
Emerging Markets Single Country trust' gong at the Citywire Investment Trust
Awards 2023: Best Performers & Best Board event in London. VNH beat a
strong cohort of contenders - Ashoka India, Vietnam Enterprise and Fidelity
China - with what Citywire described as 'impressive  information ratios and
investor returns' over a three year period.

 

Despite the VNAS Index falling 12.5%, wiping out most of the gains
year-to-date, Vietnam is still trading at an attractive valuation versus its
peers. Although sentiment in Vietnam's stock market was already shaky due to
FX pressures and weaker-than-expected 3Q earnings from big conglomerates,
intensifying global geopolitical tensions in the Middle East given the sudden
outbreak of war in Gaza greatly aggravated it in October.  Uncertainty around
the implications of the conflict fuelled fear among domestic retail investors,
which make up most of the market, leading to profit-taking and margin calls.
We still see the recent correction as a constructive trend that could pave the
way for gains in the final two months of 2023 and into the new year. To start,
the VN-Index is expected to gradually recover as the end of the US Federal
Reserve Bank's rate hike cycle becomes more evident and therefore helps ease
FX risks. Additionally, the upcoming launch of the KRX trading system in
December is a significant development for the infrastructure of the Vietnamese
stock exchange, HOSE, making Vietnam's inclusion in the MSCI EM Indices yet
another step closer. Any future upgrade by MSCI is expected to attract inflows
of US$7-10bn into Vietnam's stock market and provide a basis for re-rating of
listed companies. BIDV's chief economist stated in early November that such an
upgrade will attract "larger, more stable, and more diverse" capital flows
from foreign investors.

 

Indeed, Vietnam's economic recovery already looks promising, with further
interest rate reductions, for example, supporting strong economic and trade
growth. Vietnam hit a record-high US$24.6bn trade surplus in 10M2023,
expanding from US$9.6bn in the same period of 2022. Trade accelerated in
October with exports up +5.9% year-on-year (YoY) and imports +5.2% YoY. To put
this progress into context further, exports grew 5.3% month-on-month (MoM)
versus a -6.3% MoM decline in September as manufacturers play catch-up with an
up-tick in orders. Furthermore, registered FDI in Vietnam soared by 49.9% YoY
in October, thanks largely to big projects in solar panel and electrical
equipment production. In the past two years since participating in the 26th
United Nations Climate Change Conference of the Parties (COP26), Vietnam has
been the leader in solar power development in the ASEAN region.

 

We also see potential for more digitalisation projects, including those
enabled by artificial intelligence (AI). FPT, VNH's largest holding, announced
several initiatives, including the acquisition of the US engineering services
firm, Cardinal Peak, and a strategic partnership with Landing AI, a global AI
platform set up by the founder of Coursera and Google Brain. These moves, as
part of the company's global growth strategy, allows it to expand its tech
capabilities as well as its customer base. FPT targets 30%+ YoY growth in
signed revenue driven by rapid digital transformation, and also announced
plans to sign a partnership with Microsoft to develop more generative AI use
cases for customers, both at home and abroad. Moreover, its commitment to
education in Vietnam is on track for opening 13 new high schools in tier-2 and
tier-3 provinces across the country. Vietnam's education system is already
heavily oriented towards Science, Technology, Education and Mathematics (STEM)
with 40% of its college graduates having a STEM focus, which is four times the
global average.

 

 

 

 

 

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/)

Cavendish Capital Markets Limited

Corporate Broker and Financial Advisor
                                 Tel: +44 20
7220 0500

William Marle

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