Monthly Investor Report

VietNam Holding Limited

13 August 2024

 

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

Monthly Investor Report

A report detailing the activities of the Company for the month of July 2024 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.

Manager Commentary: Sideways

Recent turmoil in the global markets make July seem like a lifetime ago, but it was far from a boring month for Vietnam, which continued to show sustainable economic growth and enjoy yet another record high accumulated trade surplus - US$14.1 bn for the first seven months of 2024 (7M2024). Exports increased by 15.7% year-on-year (YoY) for the same period, underlining the ongoing increase in global demand for 'made in Vietnam' goods. The main drivers in July were tourism and hospitality and food services given the rise in domestic trave. With higher PMIs, a stabilising currency and healthy liquidity in the banking system, the economic growth momentum in Vietnam is expected to continue throughout the second half of 2024 despite global economic uncertainties, such as the upcoming US elections.

July saw the passing of Nguyen Phu Trong, the former General Secretary of the Party who was behind many of the positive reforms made in Vietnam in recent years. The world saw a calm changing of the guard with To Lam stepping in when Trong's sickness escalated. To Lam comes from the Ministry of Interior and is a former police officer, so we expect anti-corruption measures to continue.

Vietnam's equity market mostly went 'sideways' in July with rising volatility. The VNIndex has become relatively cheaper considering the 18.5% earnings growth of the whole market in Q2 and Vietnam stocks are even more attractive now in terms of valuation for long-term growth. The Fund ended the month with a NAV per share of +0.1% due to the outperformance of selective banks and retailers. Mid-caps and small-caps in the real estate, financials, industrials, and construction sectors underperformed as local investors took profit and reduced margin borrowings. Foreign investors also continued to sell. While the outflow was relatively small compared to the daily market liquidity, sentiment still dampened as a result.

Our nimble (and award-winning) portfolio management style allows us to navigate across a range of company sizes, which we believe has contributed to our outperformance versus the index and our peers. At times we have taken profit in sectors that have surged and have also acted swiftly when market moods and economic forces move. For example, we believe Vietnam's economy is at an inflection point and that the consumer sector is set to expand substantially in coming years. During the pandemic we saw slowing manufacturing, increasing interest rates and rising expenses impact consumer demand in a variety of industries, prompting us to adjust our portfolio accordingly. Now, with this year's steady recovery and the government's ongoing stimulation efforts, we have been adding to the consumer sector again as our research indicates better trading potential.

We regularly assess the performance of our portfolio companies on ESG factors, in addition to their financial performance, and will be reporting on this later in the year. The banking sector is the largest overall segment of the portfolio, and five banks are in our top ten holdings. Most have increased their activity in the ESG space, and many are making notable progress in committing to the UN's Sustainable Development Goals by providing loans and other retail and investment products linked to environmental and social matters. Over the past year we have also seen increasing competition among banks when it comes to ESG reporting, with MBB, ACB, and VPB taking the lead. We also expect to see more Vietnamese banks using AI to enhance customer experiences and bring new products and services to the market. This is something we will be eyeing across all sectors. Digitalisation is here to stay.

On August 8th we hosted a webinar to discuss Vietnam's role in the global AI and semiconductor supply chain with FPT, our largest portfolio holding. A recording can be viewed HERE.

For more information please contact:

Dynam Capital Limited                  

Craig Martin                                                                                       Tel: [phone]

[e-mail] |www.dynamcapital.com

www.vietnamholding.com

Cavendish Capital Markets Limited

Corporate Broker and Financial Advisor                                            Tel: [phone]      

 

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