Monthly Investor Report

RNS Number : 5355L

VietNam Holding Limited

13 September 2021

 

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

Monthly Investor Report

A report detailing the activities of the Company for the month of August 2021 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  and a summary of the report is included below.

Tough Times for Urbanistas

The streets of Ho Chi Minh City and surrounding provinces became subdued during the month of August as rising Delta variant cases spread across much of Southeast Asia, significantly dampening Vietnam's economic activities in the short-term. A strict lockdown, working-from-home and factory closures squeezed Vietnam's manufacturing sector and caused a new level of domestic disruption in the global supply chains that have been driving its extraordinary export-led growth even in 2020 when most countries endured record recessions. Nevertheless, the sense of community and social responsibility underpinning Vietnam's handling of the virus throughout the pandemic demonstrated once again why the country continues to stand out during these turbulent times. The Economist's recent article, 'The economy that Covid-19 could not stop' discussed Vietnam's unrivalled resiliency in this respect by putting its success story into context whilst also pointing out how "its successful diaspora" makes the country one of the largest recipients of remittances in the world with US$20bn flowing in last year, equivalent to 7% of GDP. Despite the Delta variant's dent on exports and retail sales, the Fund was up +1.9% for the month, led partly by our profit-taking in the banking sector which had rallied in the last few quarters but has since become more uncertain in the short-term given the bad debts building up in some loan portfolios. Our overweight in brokerage firms was also a positive contributor. Being able to trade from home, domestic retail investors became even more active with daily trading volumes hitting US$1.5 bn per day, five times the levels in 2019. We expect the brokerage sector to continue to outperform given positive developments in the equity market, with high market liquidity and lower funding cost for margin lending activities. The Fund's NAV is up 42.6% this year, leading the pack of Vietnam focussed funds.

Urbanisation is one of the key themes of our investment strategy and the communal mindset of Vietnamese citizens provides us with unmissable opportunities as responsible investors with well-defined environmental, social and governance selection criteria. The scenes in Vietnam's cities are unique, for example, with the military efforts in distributing food to those in need rather than quelling unhappy crowds in other parts of SE Asia. Ironically, in commemorating International Clean Air Day in early September, our own ESG manager recalled a national survey about working from home to help reduce global warming before anyone ever heard of Covid-19 or thought about such a disruption forcing remote working. The notion was unpopular at the time, but we have seen the population embrace the Covid-19 situation by looking for ways to turn it into opportunities to pull together and build back better.

August saw a sharp contraction in industrial production, and a large drop in retail sales and yet The World Bank's latest forecasts for Vietnam expect an overall expansion of 4.8% for 2021 and we remain optimistic for the long-term. By early September the number of Covid-19 cases had risen to more than 572,000, with 15,000 deaths. Although the vaccination rollout has not been as swift as in the West, tremendous progress was underway by early September, especially in HCMC where close to 90% of the adult population had received at least one jab. In addition, vaccination rates are increasing at a faster pace in other areas of the country as more jabs become available. Several provinces have started to ease restrictions, as a result, allowing economic activities to resume and negative impacts eventually wane.

At the EGM on 31st August 2021 shareholders approved the Market Purchase of 30% of the Fund's shares pursuant to the Tender Offer announced on 3rd August.  The Tender price of US$4.4528 per share was announced on 7th September. The 31st August NAV includes sufficient cash to fund the Tender.

For more information please contact:

Dynam Capital Limited  

Craig Martin  Tel: [phone]

[e-mail] | www.dynamcapital.com

www.vietnamholding.com

finnCap

Corporate Broker and Financial Advisor     Tel: [phone] 

William Marle

 

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