Monthly Investor Report

RNS Number : 8302X

VietNam Holding Limited

16 January 2014

 



VietNam Holding Limited (the "Company")

Investor Report

A report detailing the activities of the Company for the month of November 2013 has been issued by VietNam Holding Asset Management Limited, the investment manager of the Company. Electronic copies of the report have been made available to shareholders on the Company's website at http://www.vietnamholding.com/latest-publications.aspx and a summary of the report is included below.

Investor Report Summary

Vietnam News

Initial estimates suggest that Vietnam's economy grew by 5.4% in 2013, up from 5.1% in 2012, and just below the government's target of 5.5%.  Next year, the government is targeting GDP growth of 5.8%. In December, the HSBC Purchasing Manager's Index was 51.8, up from 50.3 in November, with marked increases in both employment numbers and new orders.

The local media reported that the government is poised to raise the foreign equity cap in select listed stocks to 60%, from 49%, in 1Q2014.  Details of the change are scarce, but will likely require the approval of shareholders in the relevant company, and possibly by the prime minister too.  It is not yet clear which companies will be eligible for the change, although roughly a dozen of Vietnam's largest listed firms are already at the 49% cap.  It is also expected that the total foreign stake in unlisted companies will also rise from 30% to 49%.

The HNX market in Hanoi is reportedly poised to open a trading platform for Vietnam's first onshore ETFs.  Meanwhile, the State Securities Commission has proposed that all of the country's commercial banks should be listed, in a bid to improve the standard of financial transparency in the banking sector.  At present, just eight of Vietnam's 40 or so joint stock banks are listed, with the rest privately held.

Vietnam's FDI inflow pledges exceeded expectations in 2013 at US$21.6bn, well ahead of the government target of US$16bn for the year, and US$6.7bn higher than in 2012.  Of the US$21.6bn, US$14.3bn stemmed from new project applications, and the balance from scale-up of existing projects. Actual FDI disbursements in 2013 were estimated at US$11.5bn, slightly above the US$11bn target set by Hanoi, and US$1bn greater than in 2012.  South Korea was the largest investor in 2013, with Samsung leading the charge.

VNH Insights

The benchmark VNI index ended 2013 at 504.6, down 0.6% for December, but up 22% for the year in VND and 20% in US$.  The Ho Chi Minh City stock market was the best performing in Southeast Asia during 2013, followed by Malaysia at 12% in local currency, respectively 5% USD-adjusted.

After a 2% increase in December, the total VNH Net Asset Value ended 2013 at US$110.5 million, which resulted in a full-year NAV/share performance of 41.6%. LCF Rothschild, which has tracked country funds globally for over 10 years, pegged VNH as the leading performer in 2013 of the 16 Vietnam equity funds.

The main reasons for this gratifying result can be found in our successful portfolio rebalancing, which further emphasized our strong focus on under-valued mid and small cap companies. As anticipated at the beginning of last year and illustrated in the tables above, the valuations for this segment markedly improved in 2013, both at the Vietnam stock market and in the VNH Portfolio.  The VNI's mid / small cap shares' valuations collectively improved by 40%, VNH's by 73%.          

The year-end 2013 portfolio segment P/Es above show the valuations of VNH's large caps as well as the mid / small caps at 23.8% and 52.7% below those of the respective VNI market segments.  These markedly lower P/Es validate our value approach.

VietNam Holding Asset Management Limited
Gyentsen Zatul	Telephone: [phone]
- Investor Relations
Oriel Securities Limited (Nominated Adviser and Broker)
Stewart Wallace / Neil Winward	Telephone: [phone]

 

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